Entries from November 2008 ↓

From the on going series GMU link of the day:

Individuals who are unaware of the price do not derive more enjoyment from more expensive wine.

Goldstein et al. via Robin Hanson

From the ongoing series don’t assume away reality:

If you are arguing against an auto industry bailout, you must not let the issue be framed in terms of either letting them fail or not letting them fail. We do not have a choice between letting Detroit fail or saving them. The only choice is between letting them fail now or spending billions of dollars in an attempt to save them.

The strongest argument against an attempt at saving them is that, while its costs are certain to be high, its success is far from guaranteed. In fact, it will probably fail.

The thing about industrial bailouts like this one is that they only come about if they are likely to fail. If this was, as Nancy Pelosi seems to put it, simply a matter of surviving this downturn, then chapter 11 protection would suffice. If this was about a lack of cash on hand and turn-around opportunities abounded, then distressed assets investors would try their luck. It is the fact that most people who know anything about the industry think that there is little chance of a turn-around that makes them need a bailout.

The choice is between letting Detroit fail now or later (after spending a huge amount of money and energy).

The scientific method & capitalism are similarly inhuman systems. They also happen to be the primary sources of our progress.

Kebko, from the MR comments section

I had previously thought that seeing how Obama would handle GM would be a good test of his early Presidency. It seems, GM might not make it until January 20.

(Probably a good thing. Lame-duck Bush might actually be willing to let GM go under instead of burning a couple billion dollars before letting it go under in a couple of years).

The fact that non-religious Americans (who don’t lie about it) are basically disqualified from high public office ensures that many of the most rational and intellectually accomplished people in our society cannot participate in electoral politics. For all I know, this is good. It may keep many of our best and brightest focused on productive endeavors, instead of squandering their abilities in wasteful games of political conflict.

Will Wilkinson

From the ongoing series Now that Obama got elected (thank God for that), we can safely denounce him without aiding the even worse guy running against him:

Greg Mankiw writes an open letter to the POTUS-elect telling him, amongst other things, to listen to his economists.

Mankiw’s advice a couple of months back was vote the economics advisor, not the candidate. In this aspect, Obama won easily. Yet, one always had the feeling that his economics advisors weren’t aware that Obama doesn’t have Reagan’s views of economics.

One of the interesting things in the first months of the presidency will be the tension between Obama’s plans and his economics advisors ideas. As Mankiw points out, McCain’s health-care plan (one of McCain’s better ideas but bad politics—a clear case of a candidate advocating good policy over good politics) was actually advocated first by Obama’s own Jason Furman (who also called Wal-mart a great progressive success story).

Under a Democratic congress eager for change power, I fear that the Chicago economists will be rapidly put to the side.

They can’t make good on Obama’s electoral promises about global warming by putting up a program the Republicans hate enough to take down, because there aren’t enough Republicans to credibly blame for the bill’s destruction. So they either have to actually pass a carbon bill that will be massively unpopular when it raises energy prices, or explain why Obama didn’t really mean it.

Megan McArdle

We are not the best people, but we’re not the worst people. Graduate students are the worst people.

30 Rock (written by Tina Fey)