If they don't like the Chinese peg, maybe next they can target Texas for its 1-1 peg to the Ohio dollar, which is obviously sucking business to Texas.
It’s hard to get the point across to undergraduates that living inside a country is like living in a big fixed exchange system. And fixed exchange systems, by construction, allow the free transfer of wealth from one location to another.
Alternatively: people who bitch about Texas are just avoiding the inadequacy of their own current location.
Via Café Hayek.
Cross posted at SUU Macroblog, which is required reading for my students.
The vague charge that immigrants will “take jobs” and lower American’s wages is not established at all in economics, and it doesn’t make much sense anyway. … Our ancestors didn’t steal Native Americans’ jobs to get rich;
Via Café Hayek.
Cross-posted at SUU Macroblog, which is required reading for my students.
Next, we notice that people tend to spend, oh, say about 80 percent of their incomes. What they spend is equal to the value of what ends up in their households, which we’ve already called C. So we have
C = .8Y
Now we use a little algebra to combine our two equations and quickly derive a new equation:
Y = 5(I+G)
That 5 is the famous Keynesian multiplier.
To see how what story perverts the math, try this:
Let’s start with this one:
Y = L + E
Here Y is economy-wide income, L is Landsburg’s income, and E is everyone else’s income. No disputing that one.
Next we observe that everyone else’s share of the income tends to be about 99.999999% of the total. In symbols, we have:
E = .99999999 Y
Combine these two equations, do your algebra, and voila:
Y = 100,000,000 L
That 100,000,000 there is the soon-to-be-famous “Landsburg multiplier”. Our equation proves that if you send Landsburg a dollar, you’ll generate $100,000,000 worth of income for everyone else.
It’s hard to explain puns to kleptomaniacs because they always take things literally.
This was in the comments, and the punchline got me but good:
A physicist, a biologist, and an epistemologist are asked to name the most impressive invention or scientific advance of modern times. The physicist does not hesitate—”It is quantum theory. It has completely transformed the way we understand matter.” The biologist says “No. It is the discovery of DNA—it has completely transformed the way we understand life.” The epistemologist looks at them both and says “I think it’s the thermos.” The thermos? Why on earth the thermos? “Well,” the epistemologist explains patiently, “If you put something cold in it, it will keep it cold. And if you put something hot in it, it will keep it hot.” Yeah, so what?, everyone asks. “Aha!” the epistemologist raises a triumphant finger “How does it know?”
And yes, I added (a politically incorrect) one to the comment thread.
In my profession as an economics professor and through churches I have attended, I've been around a lot of people who want to "make a difference." They almost inevitably equate "making a difference" with "working for a government or a non-profit organization like a church that is dedicated, at least in part, to helping poor people." Rarely do I hear anyone say "I want to work in accounts receivable for a company that makes faucets--or worse, a company that just sells faucets and other sundries."
I get this a lot. My interest in church is far smaller than Carden’s, but I have attended enough to be familiar with the sentiment.
But here's the irony: I suspect that you will probably make a bigger, albeit harder to see, difference in the lives of many by working in accounts receivable for Amalgamated Faucets …
… By helping the faucet company run a leaner operation, you can help them expand and improve their faucet offerings. This in turn helps people wash their hands carefully. This in turn reduces disease transmission. Reduced disease transmission means less tragedy and higher productivity. It might not seem like much, but congratulations: by helping Amalgamated Faucet produce more, better, and cheaper faucets, you're reducing the probability that someone, somewhere gets sick.
Is it romantic? No. Will people write books about you and give you humanitarian achievement awards? No. Will you be recognized in church? Sadly, almost certainly not. …
Here’s the thing. People, like one niece specifically but like dozens of people I meet generally every year have their heart in the right place.
But the corollary to saying “I want a job where I can help people” is that other people have jobs where they don’t help people. Who is that exactly? And if you can’t address specifically how other peoples’ jobs hurt people, perhaps more realism is in order about who’s helping them.
More generally, think about reciprocal gift-giving: I give you a gift, and you give me one in return. This is a form of helping people too. And when you help someone, typically they return the favor. The way you know you’ve helped someone is that they give you something in return. Thankfully, this behavior is very common in the employment sector, suggesting that most people’s job do help someone (often long chains of people). I really think what well-meaning people are willing to do is help someone who can’t give much in return: they’re not interested in the absolute amount they receive, but in the amount that is given relative to what the giver has. Returning full circle to religion, this is the lesson of the widow’s mite. I think it’s fair, and perhaps noble, to take this to heart … just be wary of the board strokes implied by “helping people”, and the collateral damage that does to the efforts of others.
BTW: On a slightly different note, there’s a huge campaign on to get healthcare professional to wash their hands more often. Notice the victory of romance over realism: it’s important that the saintly doctor wash their hands, but the people who make faucets, or install or repair them, or fill the soap dispensers, or watch the doctors from afar to keep tabs on their hand-washing … not so much.
Munger’s summary of the government’s position regarding Snowden, the charges against him, and the NSA’s surveillance programs:
(1) what YOU don’t know can’t hurt YOU, (2) what THEY don’t know can hurt YOU, (3) THEY need to know what YOU know, (4) but YOU need not know that THEY need to know, (5) And YOU certainly do not need to know what THEY know, (6) moreover, if YOU know THEY need to know, then the big WE can get hurt, so THEY can hide that, out of concern for YOU. (7) And mostly, we should all care more about the big WE than anything else. Especially, the big WE is more important than YOU, or YOU, or...
Or so THEY say...
This is I’m-an-assistant-principal-because-I-suck-in-the-classroom bullshit passed off as national policy.
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