пятница, 21 августа 2009 г.
Although, normally, Barlett is a free-market supply sider, after the crisis hit he has been striking compassionate tone.
In the article in question, Barlett is defending the stimulus with the following line of reasoning.
1) It is true that the financial crisis was largely caused by the mistaken government policies.
2) But those who really suffer are ordinary citizens and businesses (whom Barlett equates with the market).
3) Therefore, it would be unfair if the burden of helping the economy recover were placed entirely on the market.
4) Therefore, the Government must step in to right its wrongs.
Sounds logical, right?
But this kind of superficial logic is based on an elementary cognitive mistake of misplaced antropomorphic analogy.
The following analogy is in order. The market is the citizens who need help with, say, a broken bridge which they cannot mend by themselves. And the bridge was broken because the government, say, ordered the constructors to build the bridge from wrong materials. Since the government is to blame it must act as a repairman.
But neither the market nor the government is an antropomorphic actor. Both are institutional systems - one based on voluntary and the other - on involuntary cooperation. What the government does is it displaces the market with relations based on involuntary cooperation thereby at best impeding its work. The government thus can only help the market by allowing the market to work not by further displacing it.
среда, 19 августа 2009 г.
But let us look closer.
The debate revolves around the White House report saying that without the stimulus 161,000 jobes would be lost. The White House claims to have saved them at the cost of $ 100 billion.
Mulligan's logic is as follows:
- it is impossible to determine with precision any impact of the stimulus;
- but even if we take the claims of the White House report at face value, the cost per job (around $ 600,000) is staggering.
Goodfriend, however, says that he has evidence that 161,000 jobs were really saved by the stimulus. But he does not stop there. He then claims that he has evidence that had those jobs been lost, the US economy would have been in much worse shape than it is now (in that he is clearly confusing correlation (in this case better even to say the coincidence of the stimulus and the economic improvement) with causation).
I think Krugman and the like would have applauded Goodfriend's defense of the stimulus as quite logical. But if the magic multiplier effect (of which there is no evidence) is taken out, the whole logic collapses spectacularly and the defence of stimulus becomes what it is - an excercise in sophistry.
вторник, 11 августа 2009 г.
четверг, 6 августа 2009 г.
I was recently asked why progressive policies violate the US Constitution.
The answer is because they infringe on negative rights.
A negative right to x is a right to do x to the extent that a holder of the right to x does not violate other peoples'negative rights. It is as simple as that.
It is quite logical and non-contradictory. I can smoke pot, bear a gun, run naked in the street, spend billions on yaughts or other eccentricities and not violate any of your negative rights.
Remember that the US Constitution says that these rights are unalienable.
The only complex issue is property since the US Constitution does not it explicitly as an unalienable right.
But I can't imagine liberty or pursuit of happiness without property. For me, property is an integral, inalienable part of those freedoms. How could I have liberty to do business, to produce or exchange something without property? If you can think of an alternative to property as a necessary condition for negative liberty please share it with me.
That brings us to progressive policies. Virtually all the progressive policies (redistribution, licensing, "consumer protection", reporting requirements, you name it) infringe upon my negative rights while I in fact do not infringe on anyone else's.