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I thought I would post a link here to my comment on another thread - because the thread has died I think my comment deserves some comment. http://economistsview.typepad.com/economistsview/2016/06/productivity-inequality-and-economic-rents.html#comment-6a00d83451b33869e201b7c874c4bd970b I was replying here to a post (more thoughtful and balanced than usual from a Chicago economist) that had subtle weaknesses that I think needed pointing out. "reduce zoning and other land-use restrictions," Completely useless if you don't increase infrastructure investment in order to increase the supply of well connected land. "appropriately balance intellectual property regimes, " How about a complete rethink? "change the incentives that have led to the expansion of the financial sector as a share of the economy would all help curb excessive rents" Be precise. What do you actually want to do? "Additional measures that would reduce the scope and unequal distribution of economic rents include the promotion of competition through rulemaking and regulations, as well as the elimination of regulatory barriers to competition" So there needs to more regulation to promote competition and less regulation to stop it. Why not just see we need better regulation instead of giving comfort to the crazies who think getting rid of regulation is a panacea. But the biggest way to combat rents being an increasing fraction of the economy is simply to tax and redistribute more. All taxes come eventually out of rents. http://www.macrobusiness.com.au/2014/02/all-taxes-come-out-of-rents/
Toggle Commented 2 hours ago on Links for 06-30-16 at Economist's View
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P.P.S. I really hate first past the post, how to disenfranchise a large part of the electorate without even trying: https://www.theguardian.com/commentisfree/2016/jun/29/brexit-disaster-electoral-reform-tories-referendum
Toggle Commented 2 hours ago on The Real Lesson From Brexit at Economist's View
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I saw a commentary post in the Guardian that said that UK voters were used not to having their votes count (so protest votes were without cost). I wonder if there is unfortunately some truth in that. Voting is a bit of a paradox, if you change your single vote then it won't make the slightest bit of difference, but if everybody thinks like that it will make a big difference. Which is why voting is really the one thing you should do idealistically and not pragmatically. So long as the system doesn't make that counterproductive (i.e. first past the post). http://www.theguardian.com/politics/2016/jun/28/the-shock-of-having-a-vote-that-counts
Toggle Commented 2 hours ago on The Real Lesson From Brexit at Economist's View
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Anne ""The Real Lesson For Brexit" strikes me as obvious. Many, many British voters feel they are no longer being properly represented by the Conservative government, even as they came to feel they were no longer represented by the Labour government under Tony Blair and Gordon Brown. I quite agree, and am watching now as the new, popular leader of Labour is being attacked by Conservatives and old Labour." This is true, BUT I don't think there is any going back to the labour union solidarity model of what labour used to be. That is from a much more patriarchal world and had its own problems of favouritism and exclusion. That is why I think we need parties that EMBRACE redistribution and egalitarianism and reject the blind acceptance of meritocracy (merit at WHAT exactly) as being the primary goal. I think there is no way forward in the UK or the US unless without electoral reform to make third party candidates no longer counterproductive. We need new political parties.
Toggle Commented 8 hours ago on The Real Lesson From Brexit at Economist's View
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". We should have admission rules that favor not just ethnic diversity, but also economic and social diversity." ADMISSION RULES? What about student debt?
Toggle Commented 8 hours ago on The Real Lesson From Brexit at Economist's View
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It is shame that nobody read this.
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Oops self-contractor = self-contradictory By the way the I have tried arguing with Austrians and one actually said to me that Austrian economics didn't make any assumptions. (So not only do they reject empiricism they also reject the basis of deductive logic on which they claim to rely! HELP!)
Toggle Commented yesterday on Links for 06-29-16 at Economist's View
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RGC That web post you linked to talks about "self-contradictory assumptions" but no "self-contradictory" assumptions are highlighted (false assumptions are highlighted, but that is not the same as self-contractor). Can you illustrate what he is talking about. (P.S. I think "Austrian" economics is often self-contradictory, but it is not obviously self-contradictory in its assumptions, you need to do some analysis to realise it - mostly because the assumptions are hidden. But I wouldn't have thought that was true of mainstream economics.)
Toggle Commented yesterday on Links for 06-29-16 at Economist's View
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The anger wave that may wipe out Laissez-Faire economics??? The title is wrong. The story is about the end of the trend to ever increasing globalisation not about the end of Laissez-Faire economics.
Toggle Commented yesterday on Links for 06-29-16 at Economist's View
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"The UK is also now in a better position to negotiate a more favorable trade and investment treaty with the US" More favourable for WHOM compared to WHAT? (Yes, I know the point was that the UK has much LESS bargaining power because it is no longer negotiating as an equal but as a vassal).
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ilsm The "educated" vote smarter than we.....? Educated are synced with the .1%. I'm educated and high IQ, but I'm nowhere near the .1%. And the .1% are not anywhere near a majority or even a large minority. The problem as I see it, is that people no longer see egalitarianism as something worth aiming for.
Toggle Commented 6 days ago on Links for 06-24-16 at Economist's View
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Easy as pie - a national dividend financed by higher marginal taxes (including increased sin taxes) that is there whether you have work or not.
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A Boy named Sue "Why would they want to prop up the pound?" To stop "inflation" (somehow I also despair that people don't understand the difference between "inflation" and one-off realignments.
Toggle Commented 6 days ago on Links for 06-24-16 at Economist's View
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oops - "... move aware from ..." should be "... move away from ...".
Toggle Commented 6 days ago on Links for 06-24-16 at Economist's View
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Worth looking at this diagram from Spiegel: http://www.spiegel.de/politik/ausland/brexit-die-ergebnisse-in-einer-karte-a-1099133.html I'm sort of very despairing about what this tells me. The vote to leave, not counting the extreme disparity between England and Scotland, is extremely correlated with education levels. (Cambridge and Oxford both voted overwhelmingly to remain.) As an educated egalitarian, this scares me. Are we heading for idiocracy? I really deep down wonder why we cannot move aware from understanding income in terms of "earnings" - i.e. in terms of meritocracy. I don't care about "meritocracy" every human being is valuable and deserves a decent life. We need to resell egalitarianism. Blairism has a lot to answer for.
Toggle Commented 6 days ago on Links for 06-24-16 at Economist's View
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Benedict at large - it is not so simple, it depends. It depends on the level of resource utilisation before the borrowing, what the money is spent on and the propensity to import. I don't like the tendency on all sides of the debate to take individual items out of context and make general statements about them. Economics is dealing with a complex system, and shouldn't pretend otherwise.
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Chris Dillow repeats some of his favourite themes: http://stumblingandmumbling.typepad.com/stumbling_and_mumbling/2016/06/beyond-meritocracy.html Well worth reading and thinking about.
Toggle Commented 7 days ago on Links for 06-23-16 at Economist's View
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cm - I still like to refer to the old adage - if you want to know what is really going on, follow the money. Whoever pays the piper, gets the music he wants.
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Nominal growth targeting now. It seems to me that that is the only thing that a convergence of opinion from both the left and right (at least some sane segments of the right) is possible. Why hasn't it already happened.
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But is this adjusted for hours worked? (Don't forget there is such a thing a thing as home production and outsourcing it costs.) How much of the rise in household income is due to increasing household labour supply (mostly extra hours put in by women)?
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What worries me more generally, are signs in various parts of the world of the capture of the judiciary by government (the most obvious case at the moment is Turkey where would be King Erdogan is President even though he is not qualified and when this was pointed out produced an obvious forgery - so obvious that it amounts to an insult). the Hungarian and Polish governments are also attempting to take over their own judiciaries. The US system has always been inherently corruptible (probably a consequence of the influence of Slaveholders in the original constitutional days). We need agreed systems of ensuring independent judiciaries, and if possible, independent prosecutions. In my view judges should not be allowed to belong to political parties.
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Ah one day I will have time and resources to convert these musings into models and publish them somehow.
Toggle Commented Jun 21, 2016 on Links for 06-20-16 at Economist's View
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P.S. I think that exponential growth is probably not exponential growth, but the sum of a lot of hysteresis curves. You may be convinced like Milton Friedman that none of this matters if it roughly fits the data, but eventually it will. We are far too inclined to see aggregates without thinking about the components that compose these aggregates. When I make an exchange (and GDP is composed of lots of exchanges), I am making an exchange because I am in disequilibrium (I have something I don't need and I am getting something I do need). If all exchanges are made and nothing further happens, then the economy comes to a total standstill. But of course there are forces that create the disequilibrium that will lead to next exchange etc. It seems odd to me to model a fundamentally dynamic process as though it is a static process.
Toggle Commented Jun 21, 2016 on Links for 06-20-16 at Economist's View
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Peter K. "Maybe I am misreading him but sounds to me like Farmer believes in more than one equilibrium. " Yes, he does, but I don't. If you like I believe that the economy is much more dynamic than any equilibrium model would have you believe. It is always changing, it is just that sometimes the negative and positive changes roughly cancel out.
Toggle Commented Jun 21, 2016 on Links for 06-20-16 at Economist's View
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