Thursday Highlights

Good morning.

  1. Early maths.
  2. Consistency.
  3. Terrify the Kremlin?
  4. I’d never even heard of Nowruz. So know you know.
  5. Just remember “real utopias” typically have a archipelago of gulags for the millions of kulaks who don’t see your utopia as utopian.
  6. Two words, fullness and mystery.
  7. Again, I think this is a symptom of an underlying disagreement, on which my homework is to write more tonight. I’d started a post on that topic and changed my mind halfway through. I need to work toward a conclusion again.
  8. This is not unrelated.
  9. Zooom.
  10. Striking down some regulations. Wooo.
  11. Babbage in action.
  12. More grist for the drone conversation and the difference between killing as a soldier and murder.
  13. So, privileges for gays … means you need tests to verify the category.
  14. Mr Krugman, sloppy reader, noted in response here.
  15. Yikes.

18 responses to “Thursday Highlights

  1. More grist for the drone conversation and the difference between killing as a soldier and murder.

    A good story but what about the bomber itself? What was its mission? To drop bombs from thousands of feet high, often the target was civilian cities or near civilian centers but even if it wasn’t aiming was known to be so unreliable that they knew there was a very good chance a bomb would kill someone ‘not in the fight’. It seems from that perspective drones bring some humanity back into bombing, the bomber again sees up close who he is aiming to kill.

  2. Boonton,
    American bombers, as you recall, performed only daylight raids to increase accuracy and minimize civilian/collateral damage as much as possible with the downside that they took far heavier losses. British bombers in the same period performed night raids, which minimized their losses but had far more difficulty putting tonnage on target.

    The bomber pilots and crew were not in Air Force office in Wichita, killing targets by name “up close” as you claim.

  3. Are you going to make the argument that daytime bomber runs in WWII were more precise than modern day drone strikes?

  4. Mr Krugman, sloppy reader, noted in response here.

    I don’t think they address the core issue Krugman raises, namely that trying to contract the gov’t in a depressed economy is counter productive. I’ve been here in Barecelona for a week now and this country is a case study of how trying to shrink the deficit when faced with a deep recession produces nothing more than a deeper recession and even bigger deficit (every dollar or Euro cut ends up producing 1.75 Euros in either less taxes or additional people showing up on the unemployment line).

    The response about permament changes in gov’t spending over time is valid but totally consistent with both Keynesianism and what Krugman has written before.

  5. BTW, the method of boosting the economy via ‘expansionary austerity’ consists of causing interest rates to fall. Let’s keep in mind that it wasn’t only a few weeks ago you where jumping up and down at the idea that lower interest rates was some type of class warfare genocide against the saving class.

  6. Boonton,
    No. Special forces raids however are more precise than drone strikes. But they (like daylight bombing) are more risky and are obviously acts of war.

  7. Boonton,

    Class warefare genocide?

    Stop hyperventilating. I’m not (and wasn’t). Look you have often claimed in religious and other social contexts that economic pressures are powerful and perhaps dominant. Two examples contra savings (and your statistics were suspect … btw … but set that aside) … So, save for college for your kids, except if you spend and go in debt you are more eligible for aid. Save for retirement is important and as retirement approaches you want to move to fixed income interest bearing low risk accounts, which you are forcing out of existence at the same time you are pushing more based tools for retirement. How do either of these encourage personal savings?

  8. Boonton,
    Look into how much paperwork is involved in starting a new business. Say you want to hire your car as a taxi. Can you? How entrepreneur friendly is the country? Those are the things (not interest rates) that spur the economy. Reducing government spending is mostly (and should be) irrelevant … unless government spending dominates the economy in case you’ve already well passed screwed the pooch, so mayaswell bite the bullet and start anew.

  9. Let’s remember in Vietnam the US embraced high altitude bombing in the daylight with air superiority. And special forces raids are not always more precise than drone strikes. In a drone strike the operator has no need to be ‘trigger happy’ to protect one’s own life.

    Re savings:

    The problem with your analysis is that incentives cut both ways. Consider saving for retirement. A high interest rate means you get more income from your savings hence that’s an incentive to save more. It’s also an incentive to save less. If your goal is to have $50,000 a year for retirement then a 10% interest rate means you only have to save $500,000 while a 5% one means you have to save $1M. Some will respond by saving more, others less making the relationship unclear.

    A more difficult concept is that debt and savings are always by definition equal. If you talk about increasing savings, you’re also talking about increasing debt. Or another way of saying that is you can’t increase saving without also increasing borrowing. Since the collapse the US gov’t has been increasing borrowing while individuals and corporations have been reducing borrowing. The deficits are producing an asset the market really wants, safe long term bonds, and the interest rate is the signal that it still wants it.

    Look into how much paperwork is involved in starting a new business. Say you want to hire your car as a taxi. Can you? How entrepreneur friendly is the country?

    This is a valid question but not one that’s relevant to the discussion of Krugman, interest rates, or savings. Do you want to change the subject ?

  10. Boonton,

    This is a valid question but not one that’s relevant to the discussion of Krugman, interest rates, or savings. Do you want to change the subject

    Unless you feel that government spending or not spending is the wrong approach to promoting growth, i.e., that you promote economic growth in an environment in which business is very restricted first by removing or lessening said restrictions.

    The problem with your analysis is that incentives cut both ways

    I’ve cited a few ways in which government has produced incentives to not save. You’ve not offered any in which there are incentives to save.

  11. Unless you feel that government spending or not spending is the wrong approach to promoting growth, i.e., that you promote economic growth in an environment in which business is very restricted first by removing or lessening said restrictions.

    Again this seems like two different topics. If you want to say that regulation X is bad, then please do so. That has nothing to do with recessions or economic growth. If regulation X is bad, then it should be abolished even if the unemployment rate is very low and economic growth very high.

    I’ve cited a few ways in which government has produced incentives to not save. You’ve not offered any in which there are incentives to save

    Every anti-saving incentive you’ve cited is also a pro-saving incentive for the reasons I cited. If your savings interest rate is low, that’s an incentive to save more since you’ll need to save more to reach some goal (such as financing a big vacation or new home). Likewise a high interest rate is also a disincentive to savings since less savings will be needed to achieve the same goal.

  12. Boonton,

    If regulation X is bad, then it should be abolished even if the unemployment rate is very low and economic growth very high.

    Apparently you think regulation is simple. Regulations often exist to aid some group, which in good times is relatively harmless and may in fact help the group you are favoring. However, in bad times, that cost is not appropriate. Just like high government spending to help favored groups (like heated swimming pools for a business as a perk, say as an extreme example) in hard times you cut the fru-fru because you have to concentrate on the bottom line. Regulations are often akin to the spa at work. A real example might be handicapped access. Our company built their building 5-6 years ago. We were required to put handicapped bathroom, access and all that. Costs say several $100k. In the 6 years since we built the building there has never ever been a handicapped person in the building. Now we are a small company but doing well, if we were in hard times the build/not-build decision for a company on the margin may hinge on those extra costs … which ultimately in these times are hampering growth.

    Trillions, of course, is just a number made up out of nothing.

    No. That’s the estimated costs for Kyoto which the warming faithful warn is not enough.

    Every anti-saving incentive you’ve cited is also a pro-saving incentive for the reasons I cited

    I’ll have to remember that. Every anti-gay racist policy is also a pro-gay pro-diversity policy. And how exactly is an incentive to spend you money now to get access to financial aid for your kids college expenses an incentive to save?

  13. Costs say several $100k. In the 6 years since we built the building there has never ever been a handicapped person in the building. Now we are a small company but doing well, if we were in hard times the build/not-build decision for a company on the margin may hinge on those extra costs … which ultimately in these times are hampering growth.

    If your company was suffering hard times why would it be building a new building?

    Regulations often exist to aid some group, which in good times is relatively harmless and may in fact help the group you are favoring.

    Or another way of saying this is regulations reassign costs. Let’s consider the pro’s of the handicapped regulation that applied to your building.

    Off the top of my head, a few stand out:

    1. Making the world easier for handicapped people.
    2. Making the entire economy more flexible since an increase in handicapped people (which is coming due to an aging population and other factors) will not mean as much rebuilding needed.
    3. Providing for uniformity of buildings (the world is a better place because building codes exist. If every stairwell, say, played fast and loose with its ratios and dimensions it would make other aspects of life much more difficult).

    Now consider if you relax the code. The pro’s reverse and become costs. Not being able to easily navigate your building becomes a cost for a handicapped person. Granted it may be a small cost if there’s no handicapped person who happens to want to use your building, but even a loss of options is a cost. If Niagra Falls shut down forever tomorrow, my range of options becomes smaller even though I wasn’t expecting to visit it anytime soon.

    All things being equal relaxing the regulation is not reducing the total costs, just reassigning who bears them. If ‘times are heard’ meaning a general recession (not just times being hard for your particular company), then they are hard on everyone incl. handicapped people. How does increasing their costs help the overall economy?

    Now if the regulation is poorly crafted so it imposes great costs on your company while providing much less in benefits upon others, then you have a good argument for abolishing that regulation. But that argument is valid no matter what the general economic condition.

    So to sum it up:

    Some costs/benefits are hidden from economic accounting. That doesn’t alter their nature. For example, a decrease in local crime may mean you spend less on home alarm systems and less on homeowners insurance. Accounting wise that’s a decrease in local GDP hence a ‘cost’ but that’s only because the benefit of less crime is not directly captured in an economic transaction that can be measured.

    Therefore: Do not confuse ‘sweeping’ costs into the hidden areas of economic measurement is the same thing as cutting costs!

  14. I’ll have to remember that. Every anti-gay racist policy is also a pro-gay pro-diversity policy. And how exactly is an incentive to spend you money now to get access to financial aid for your kids college expenses an incentive to save?

    Doesn’t quite work like this. Keep it simple.

    Many people have 401Ks were the employer will match your contribution, say up to 4%. So if you contribute 2% they will kick in 2% too. Think about that. That’s like earning an interest rate of 100% on top of the other tax incentives you get. Why do people not take this offer up?

    Well two motivators:

    1. If I save $1 today, then 20+ years from now I’ll have $2 or more! So this is a positive motivator assuming except for my discount rate. 20 years from now I may be dead so I don’t consider $1 today = $1 in 2033. If I have a high discount factor (short term forcused), this isn’t a good trade for me. If I have a low discount factor, it’s a good trade for me and I’ll save more today. So yes higher interest rates, returns, rewards etc. tend to increase savings from this motivator.

    2. Goal orientated saving. Say I assume I will just need $100,000 or so in my 401K. With my house paid off, Social Security for income, Medicare for health and possibly being able to work part time into my retirement I only need a cushion of $100K or so. A higher reward, return, interest etc. means I get there that much faster. Hence no need to save as much today.

    So these two incentives are in conflict and whether or not increasing interest rates causes more or less savings depends upon which motivation happens to be stronger for a particular person at a particular time.

    This doesn’t work for all incentives. Take speeding. Higher fines for speeding simply increase the cost of speeding hence increase my incentive to avoid speeding. Higher social stigma for anti-gay comments increase the price of such comments. It’s hard to demonstrate a contrary incentive except, maybe, some people just like being socially unacceptable so the more anti-gay comments are taboo the more likely they are to utter them.

  15. Boonton,

    If your company was suffering hard times why would it be building a new building?

    ’cause your lease ran up and property values were low? Perhaps property values took a hit? Perhaps some economists like to pretend there is a corporate cash glut. Perhaps you’d like to remove some barriers to construction? Hmmm?

    Making the world easier for handicapped people.

    A set of measure 0 apparently. In six (8?) years no such people have emerged.

    Making the entire economy more flexible since an increase in handicapped people (which is coming due to an aging population and other factors) will not mean as much rebuilding needed.

    Apparently allowing flexibility and encouraging investment during economic hard times is hard to grasp.

    All things being equal relaxing the regulation is not reducing the total costs, just reassigning who bears them.

    Not necesssarily. It may also be reducing opportunities for lots of others. You’re in the mode where you pretend economics is a zero sum game. That’s a common liberal assumption that isn’t true.

    Remember the story of the Nuns of Mother Theresa’s order that wanted to build a homeless shelter in New York? If you don’t remember I’ll recount, but you need to put that in your regulations just re-assign costs and smoke it a bit.

  16. ’cause your lease ran up and property values were low? Perhaps property values took a hit?

    If property values were low your landlord would have a pretty good incentive to renew your lease at favorable terms, esp. if ‘times were touch’.

    A set of measure 0 apparently. In six (8?) years no such people have emerged.

    YOu mean for your particular building. Certainly you aren’t saying in the last 8 years, out of the millions of handicapped Americans, none of them have set foot in any building that was even a bit more accessable due to regulations/codes?

    Not necesssarily. It may also be reducing opportunities for lots of others. You’re in the mode where you pretend economics is a zero sum game. That’s a common liberal assumption that isn’t true.

    A well crafted regulation is either zero sum (your building’s loss is the handicapped gain) or positive (the handicapped person’s gain is bigger than your loss). If it is negative (handcapped gain is less than loss) then you have a regulation you should abolish irregardless of the economy’s condition.

    Remember the story of the Nuns of Mother Theresa’s order that wanted to build a homeless shelter in New York? If you don’t remember I’ll recount…

    Certainly you’re old enough now to know not to trust media accounts of such sensational stories.

  17. Boonton,

    If property values were low your landlord would have a pretty good incentive to renew your lease at favorable terms, esp. if ‘times were touch’.

    Which was more volatile rents or actual property … and we’re a small privately owned company, equity was also a value.

    Certainly you aren’t saying in the last 8 years, out of the millions of handicapped Americans, none of them have set foot in any building that was even a bit more accessable due to regulations/codes?

    You’re on the zero sum thing again. Get off it. Yes, millions of handicapped American benefit from access (and 10s of millions use access for profit … but economic incentives to get the business of the handicapped might be just as well a choice not a requirement). 100s of millions lost the benefits of those businesses that didn’t open.

    Certainly you’re old enough now to know not to trust media accounts of such sensational stories.

    Sensational? Huh?

    or positive (the handicapped person’s gain is bigger than your loss)

    Or not. More likely the handicapped person’s gain is bigger then my loss. But the handicapped persons gain isn’t likely 1000 times my loss, and the populations of truly handicapped is likely less than 1 in 1000.

  18. Which was more volatile rents or actual property … and we’re a small privately owned company, equity was also a value.

    Actual property. To justify renting, your company just has to feel confident it can earn good money for the next few years. To justify owning and building your company needs to feel confident about itself for the next few decades.

    You’re on the zero sum thing again. Get off it.

    You’re the one measuring things by whether or not any handicapped person ever used your one little building. That’s about as sensible as saying the intersection outside your building has never had an accident therefore the stop sign is a waste of money.

    Sensational? Huh?

    Yep, also the story fits very well with preconceived narratives and is difficult to really fact check. 9 times out of 10 such stories end up being false or leaving out really relevant details (see, for example, the McDonald’s coffee burn case). Let’s also not forget you’re just reciting the story from your distant memory which means you’re almost certainly only remembering half of it to begin with.

    Or not. More likely the handicapped person’s gain is bigger then my loss. But the handicapped persons gain isn’t likely 1000 times my loss, and the populations of truly handicapped is likely less than 1 in 1000.

    In which case the benefits are trumped by the cost making it an example of a regulation that should be abolished. (But note the direct benefit to individual handicapped people is only one benefit all have to be added together.

    But you haven’t really made your case about using regulations as a recession fighting tool. A regulation is either net positive, neutral, or net negative. If it’s net positive then you’re not helping in a recession by relaxing it. You’re just hiding the costs, like a police department that reclassifies shoplifting as a non-major crime then announces a stunning drop in crime. If it’s net negative it should be dropped no matter what the condition of the economy since it costs more than it benefits all of us.

    Likewise tools to fight a recession are also used in reverse to tamper a boom. That would mean if the economy is at full employment and inflation is picking up you would increase regulation (gold plated handicapped rails?).

    I think the problem here is that regulation is too illiquid to function the way you’re trying to make it here. The accounting for costs and benefits is not transparant enough and too likely to be influenced by lobbying to be effective. Now monetary policy suffers from none of that. Print money if inflation is low, stop printing and redeem if its high. What could be easier or more flexible?

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