George Lopez Agrees With Louis CK

I saw George Lopez live last night.  Very entertaining, though he seemed a bit punch drunk and bitter from a divorce.

A common theme in Lopez’s act was how well we live compared to even just a generation ago, which reminds me of the comedian Louis CK’s “Everything’s Amazing and Nobody’s Happy.”

He harped on how good our kids have it and showed that he’s a good economics thinker by asserting that we’re raising our kids as dependent wimps and that probably won’t end well.  We are the broken feedback loop.

One story he used to illustrate the point is how he baby-proof our homes to prevent our young children from getting hurt.  This is me, paraphrasing:

We put rubber on the corners, we plug the outlets.  When I was a kid, if we were walking around with a butter knife, adults encouraged us to stick it in the wall socket.  We’d shoot across the room and as we’re lying on the floor recovering the adult would come over and tell us to use our brains.

Kid walks into the kitchen and asks, “Is that pan hot?”  Adult: “You tell me.”

He talked about how we don’t even think twice about spending $30 here and there to buy our kids stuff now.

Back then $30 was a lot of money.  Heck, today it’s a lot of money.  We give our kids so much.  We didn’t have that back then.   We climbed trees, played marbles and doctor!

One line of Lopez’s reminded me of a Tony Blair, and perhaps Churchill quote: “You can take a true measure of a country by looking at the number of people trying to get in and the number trying to get out.”

Lopez:  “America is a great country.  You can tell because a lot people try to sneak in and not very many want to sneak out.”

And, I agree with Lopez on immigration.

Most immigrants come here to work and earn a better life than they had by doing jobs that Americans don’t really want to do.  Let them.

We all benefit from immigrants and most of us are too dumb to realize it.

I think the the biggest immigration problem we have is that our government places artificial limitations on the number of immigrants to admit and it creates other artificial barriers to them becoming legal, like the minimum wage.

Great Explanation of QE2

Here’s the best explanation I’ve seen on Quantitative Easing from Steven Landsburg.   I recommend reading the whole post, but if you are curious about what exactly QE is, here it is in a nutshell:

They’re creating 600 billion new dollars and using those dollars to pay down the government’s debt.

The rest of Landsburg’s post does a great job of explaining potential results of this action.

If I understand it correctly, the net effect will likely be the transfer of wealth from those who are holding to dollars to the folks who sold their bonds back to the government.

Thanks to Steven Landsburg for taking the time to explain this.

What will health insurance look like on the new exchanges?

Here’s a reasonable guess from Megan McArdle:

What people are expecting seems to be a very expensive form of insurance (no gatekeepers or restrictions) on the cheap.  What they’re going to get is cheap insurance that they will be forced to buy.

Or as the Rolling Stones put it, You Can’t Always Get What You Want.

Here’s my comment to Megan’s blog post:

Remember the ’08 election issues? Solving the perceived problem of 45+ million uninsured was a major one.

Who knew it would be so easy to fix? Simply make it unlawful for these 45+ million to choose to be uninsured. Problem solved.

Just think of all the things we can solve.  Maybe we should outlaw unemployment.

More evidence they didn’t get the message

From Yahoo News: Pelosi expected to remain House Democrats’ leader

Her allies predicted she would win overwhelmingly, particularly given the 129-68 vote to defeat an effort by Pelosi’s critics to postpone the leadership election until next month.

Though, an analytic mind might point out that 68 votes seemingly against Pelosi is higher than it would have been a year ago and trending in the right direction.

They might also point out that this could mean that they want to take the leadership vote quicker to get her out of the spotlight sooner.

Revealed Preferences

Since he seems like such a big fan, it’d be nice if Soros chose to live in China and leave us free of his desire to impose his will on us and consolidate political power into overreaching politicians.

Robert Frank on EconTalk

This week’s EconTalk podcast has Robert Frank of Cornell University discussing income inequality with host Russ Roberts of George Mason University.

This seems to be a fundamental basis of Frank’s mental model (about 4:40 in):

So the best situation from an economist’s perspective is the one that leads to the largest surplus. For the non-economists in the audience, surplus is just the cumulative sum over all people of the difference between the benefits they get and the costs they bear, evaluated in their own terms. So, if we can make the economic pie bigger, the attraction of doing that, is that it’s always going to be possible for everybody to have a bigger slice than before. I don’t think that requires any difficult value judgment at all.

I added the emphasis.

I agree that surplus is the difference between benefits and costs, evaluated on our own terms. That’s the root of why our standard of living is much better than our ancestors.  We trade our surpluses in mutually beneficial manners with each other to make our lives even better.

But, I disagree with Frank’s last sentence.

As individuals, making value judgments on our own terms isn’t difficult.  We make them naturally every day.  I often to choose to pay $2 for a cup of coffee even when I can get it free elsewhere.  That might sound absurd.  But, I finish the $2 coffee because it tastes good, while  I throw out a half cup of the free coffee because it doesn’t.

What bothers me about Frank’s last sentence is that I don’t believe he’s talking about individuals making their own value judgments any longer.  I believe he’s talking about economists and politicians making value judgments for individuals based on their assessment of what creates the greater good or the largest pie.  Unlike Frank, who seems to think this is easy, I don’t think it is possible for a third party to appropriately assess how others judge value.   That’s an awful lot like the thinking that leads to destructive central planning. 

I would like to ask Frank if he was given the power to enact his policies to maximize economic surplus, how would he know if he happened  to be wrong?  If he were wrong, how would that be corrected?

Blinder’s Name Fits

I’m left wondering why the Wall Street Journal publishes Alan Blinder.

Blinder comes across as arrogant and smug, which I don’t think is befitting of op-ed space in WSJ.  Here’s an example:

For months, we have witnessed the spectacle of people arguing that Keynes was wrong. Somehow, additional government spending actually reduces employment—even when the economy has huge amounts of spare capacity and unused labor desperate for work; even when the central bank will prevent interest rates from rising to “crowd out” private spending. Really?

One current catchphrase is “job-killing spending.” Hmmm. How, exactly, does more spending kill jobs when there is idle capacity and no threat of rising interest rates? Stumped? So am I.

The anti-Keynesian revival has been disheartening enough. But now the economic equivalent of the Flat Earth Society is turning its fury on Ben Bernanke and the Federal Reserve.

If you have a case, state it.  No need for the ‘Really?’ and Hmmmm… That’s more befitting for a blog post, not a serious newspaper.

And, the worst part, hes’ wrong.  I eagerly await the economists to debunk his column.  Here’s the first debunking that I’ve seen from Charles Rowley.