Dead Seriously.

A few actual and lots of fake Dead Seriously readers!

Dear Dead Seriously,
Why go all Mailbag on us? I mean, isn’t that kind of vain of you to brag about how much fan mail you get?
-Rick in Omaha

Good question, Rick. Over the past couple of months, I’ve received a lot of email and comments with questions about various aspects of Proposition 8, including the LDS Church’s involvement in the campaign, my personal feelings about Prop 8, gay marriage generally, and other things. I’ve tried to address these questions in other posts, but have often not had time or energy. Since time is running out and all other more creative attempts have not come to fruition, I’ve decided the easiest way to do this is to go Mailbag-style the rest of the way. As far as bragging is concerned, I’m doing my best not to be an arrogant prig, but 29 years of conditioning is tough to fight against. Read more…

A Bleg to anyone out there who reads this:

Does anyone have information about how many California voters are using early-voting to cast their ballots this year?

This article says that nationally, the proportion could be as high as 30% by election day (but, is a November 3 vote really an early vote? By definition it is, but I doubt it really translates into anything meaningful*.) That number seems really high to me, especially when 19% of that estimated 30% have only said they plan to vote early. I think we can all agree that when voters say they’ll vote and when they actually vote may be very different dates. Suppose half of that 19%–10% for ease–actually does vote in a meaningfully early fashion–by tomorrow, for example. That puts the national early voting at 20%. Is that really something to base your advertising campaign’s decisions on? Hmm…

*By “meaningful,” I mean “early enough that any last-hurrah-advertising or endorsements would have an impact.” Obviously, if a voter voted last month, then the answer to that question is no.

I’m very hesitant to post this, because it is so inflammatory, but it is so relevant and potentially affects so many people I know, that I feel it is worth passing on. It reminds me a lot of something that this one guy said this one time, albeit in a less life-and-death way: Make the Mormons stop, or we’ll stop them with force.
Read more…

A fellow named Jacob Weisburg, of Slate Magazine wrote a piece today in which he declares that the financial crisis that has been going on is proof that libertarian philosophies are dead in the water. He provides some examples of how libertarians in positions of power (Greenspan, for example) would have been able to prevent the current disaster, but-for their ideology that prevented them from making the right choices. In short, libertarians’ misplaced faith in markets is the cause of all of this.

At the end of his article is one of the nastiest tongue-lashings that I, as a libertarian, have ever received:

“The best thing you can say about libertarians is that because their views derive from abstract theory, they tend to be highly principled and rigorous in their logic. Those outside of government at places like the Cato Institute and Reason magazine are just as consistent in their opposition to government bailouts as to the kind of regulation that might have prevented one from being necessary. “Let failed banks fail” is the purist line. This approach would deliver a wonderful lesson in personal responsibility, creating thousands of new jobs in the soup-kitchen and food-pantry industries.

“The worst thing you can say about libertarians is that they are intellectually immature, frozen in the worldview many of them absorbed from reading Ayn Rand novels in high school. Like other ideologues, libertarians react to the world’s failing to conform to their model by asking where the world went wrong. Their heroic view of capitalism makes it difficult for them to accept that markets can be irrational, misunderstand risk, and misallocate resources or that financial systems without vigorous government oversight and the capacity for pragmatic intervention constitute a recipe for disaster.” (Full text here)

Intellectually immature? Zing!

I think he grossly overstates the ironcladdedness (I know it’s not a word) of his arguments against libertarianism–everything he said is an opinion, not a theorem (watch me falling into his caricature of libertarians justifying their beliefs!), but I don’t want to talk about those. Rather, I find his article to be instructive for a couple of reasons.

First, libertarians like me (little “L”) will rarely claim that the market is infallible. I certainly believe that market failure exists, and that it is often devastating to many people, if not entire economies. However, admitting that markets can “be irrational, misunderstand risk and misallocate resources” is not the same thing as saying that governments can improve upon these outcomes. Even supposing–just for argument’s sake–that Weisburg is correct in his assertions that free markets are the cause of this crisis, we are still without any proof that any alternative path would be an improvement. However, evidence that it might be significantly worse is abundant (the fact that Weisburg mentions the fall of the Soviet Union–a centrally controlled economy–in this article while advocating for more government controls is soaking in irony).

Market failure exists–this may be true. But the existence of market failure does not mandate government success. The current market outcome may be bad, but it takes no courage whatsoever on the part of folks like Weisburg to sit back and lob volleys at libertarians, whilst his own theories still carry their own susbstantial burden of proof.

Another interesting bit was his reference to Ayn Rand novels. He is correct that many libertarians are fond of Rand’s novels (including yours truly). The funny thing is, Ayn Rand–as I understand her philosophy (rebuttals are welcome here)–never advocated libertarianism / capitalism on the belief that it was infallible in any way. Rather, Rand’s point was simply that her flavor of free market capitalism–the strict protection of individual property rights–is the only moral way to live. The benefits of capitalism that come from efficiency and wealth are wonderful, but Rand continually emphasized that any other system–collectivism, as she generally referred to them all–were simply immoral because they stripped a man of that very thing which is most prized by him–his own creation and ingenuity–and gave it to those who were unwilling to create and innovate themselves.

Rand’s novels are not without flaw, but that is a post for another day. However, to say that Rand-inspired libertarianism is dead because a market was inefficient is naive, as it completely misinterprets the devotion to markets in the heart of libertarians like myself. That devotion has less to do with a belief that markets are always right and more to do with the belief that markets are the only source of a financially moral society.

As always, rebuttals, criticism, and comments are welcome.

for suggestions about the future of the blog and other things.

First, thanks for taking a minute to contribute and give me feedback on different areas here. In the long run (meaning years) I would like to develop this into something that has a large readership (How arrogant does that sound?), and I want to be careful not to derail myself before I get going. It will be some time (again…years) before I can devote as much time to this as I would like, and right now I’m just trying to lay some good groundwork.

As a couple of the comments pointed out, my main interest is, and likely always will be, the intersection of Economics, Mormonism, and Libertarianism. The conflict I have with focusing on this area heavily is simply that I have doubts about whether that intersection could ever possibly be interesting to someone who doesn’t have a personal interest here–friends, family, etc. Economics? Yes. Libertarianism? Yes. Mormonism? Yes. Economics and libertarianism? Yes. Economics and Libertarianism, and Mormonism? I dunno…

Honestly, how many libertarian economist Mormons are there out there? Mormons will read anything other Mormons produce, so the obvious solution here is to make as much of my content Mormon related. But that defeats one of my primary purposes–to NOT become a Mormon blog. I have this goal, not because I hate Mormon blogs (well, actually, I do think most of them are complete crap), but because I–like most people–would prefer that my opinions, analysis, thoughts, etc…be taken seriously by anyone who reads them. I think that religious labels–and Mormon ones in particular–are counterproductive to this end. Am I wrong here?

Simply stated, I fear being lumped into a “religious right-wing nut job” group, because a) it’s not an accurate assessment of my views and b) even if it were, it’s still a worthless ad hominem criticism. So often–this has become more obvious to me over the past few months in California–policy stances that come from religious people are quickly discarded/discounted, not because they were without merit, but simply because they came from religious people and a lack of merit was therefore assumed.

One goal also is to add more authors, whether they be permanent or guest authors, as one comment suggested. On the surface, this goal also is made more difficult by my inclusion of Mormon topics, but I haven’t had the time to investigate the idea enough to say much more about it.

Again, thanks for the comments and suggestions. More later.

Lots of Mormons vote for Republicans. As noted in an earlier post, this tendency has drawn criticism and consternation from supporters of the Democratic party. The purpose now is not to explain why most Mormons vote for Republicans, but simply to explain why I don’t vote for them with any kind of regularity.*

(I must warn you, though…this may not be a coherent piece of writing, because I’m kind of under the weather right now, I’m home by myself, it’s late, and I’m scared of the dark.) Read more…

Yale University Law School isn’t in the Top 10 “Career Prospects” law schools, but Boston College is–according to the latest Princeton Review rankings. Above the Law is offering a sweet deal to anyone who actually believes this:

“I dare somebody to get into Boston College and Yale and go to Boston College because they think that is a better career move. Send ATL both acceptance letters and a BC transcript, and we’ll send you $100 and a photograph signed by God.”

For some reason this reminds me of people I’ve met who tell me that they went to a lower-ranked program because they “just liked it better” when the truth is probably that they “just didn’t quite get accepted.”

It’s official: Carne Asada is NOT a Crime.

Says their attorney:

“After all, they’re not selling porn, they’re not selling drugs, all they’re selling is food.”

You sure can’t argue with that kind of legal reasoning. At the same time, I’ve seen some taco trucks that could probably rival porn and drugs as far as self-destructive outcomes are concerned.

Official Save Our Taco Trucks website. My original post on this topic here.

The following is an excerpt from an email exchange with an attorney friend of mine this morning (with permission):

My Lawyer Friend: Nothing destroys your ability to write clearly and concisely as well as law school. Of course, I wasn’t a very good writer in the first place.

Me: Isn’t what you said about law school and writing a little bit ironic? I had always figured that law school would refine those skills…

My Lawyer Friend: Law school refines the ability to nitpick and identify large numbers of issues in a situation, no matter how inconsequential those issues may be. The law student gains the ability to argue for countless pages and/or hours about those issues until an adversary gives in from sheer exhaustion.
Here is the truth: the law student’s nonlegal writing ability is eroded because most law exam answers are graded on (1) the number of issues spotted, (2) the number of arguments about those issues, and (3) the length of the answer. The best strategy is to type as fast as you can for 4 hours and avoid thinking. I suspect that most law professors give little or no credit for pithy writing, clarity, or conciseness.

from CNN.

RP is stressing the moral hazard (investors will take stupid risks because they know the govt will bail them out) that is created/worsened by continuing to prop up failing institutions and policies. Tyler Cowen argued earlier that this moral hazard argument is not very convincing, because it many of the people who took such risks under Fannie & Freddie and other recently failed institutions have been more or less wiped out .

I agree with the latter, in the sense that bankrupt companies and the shareholders of those companies have certainly received a big hit; but I’m not sure the right people have been “wiped out.” Collateral damage seems to be including far more than just those who didn’t assess risk properly.

“Stocks that do well, should the civilization screech to a halt.“

Never the sort of government to leave the food industry alone, the Governator just signed a new law that requires “Chain Restaurants” to list calorie content on menus. This requirement alone isn’t so bad, I suppose, but the statement from the bill’s sponsor–Alex Padilla, of the San Fernando Valley– didn’t make it past my laugh test:

“The way Californians order food is about to change. All Californians will soon be empowered with reliable, accessible nutrition information.”

Wow. Thank you, Alex. I think we can all expect big things from the widespread community empowerment that will surely result from this legislation. I, for one, can already feel the empowerment flowing into my bones. From this point on, the way I order food is going to change. No longer will I simply order a steak; nay, I will now order a steak with the power of truth and knowledge. Never again will I order a piece of cheesecake under the–apparently false–understanding that it is a health food.

Of course, the question of why this law only applies to chain restaurants is not addressed. The only explanation I can think of is that, deep down inside, Alex doesn’t like poor or middle-income people. Imposing more menu costs on firms will inevitably raise the prices consumers pay for the same food. Chain restaurants appeal largely to poor and middle-income folks, so it stands to reason that the highest income folks will be the least affected by it.

Of course, even if the cost were imposed on all food service providers, this essentially amounts to a sales tax after pass through, and we all know that sales taxes hurt affect low income people far more (by requiring a higher percentage of their total income). Well done, Alex.

In other matters of ridiculousness, the Governator “rejected a proposal to remove ‘communism’ as a reason for dismissal from state employment.” I am not making this up.

Why it’s OK…in terms designed for mass, non-economist readership, from Harvard guy Jeffrey Miron via CNN.

From MR:

“It’s also worth considering the new equilibrium. If things do not totally tank right now, Paulson and Co. truly have zero credibility — for better or worse — the next time they claim that some particular policy action has to be done.” (full text here)

From The Austrians:

“It’s interesting to read the gnashing of teeth on conservative blogs like National Review’s “The Corner.” They are upset about it going down. Why? Because it will make the GOP look bad and perhaps even destroy whatever’s left of McCain’s candidacy. All I have to say about that is this: This just shows how little establishment conservatives really care about markets. It’s about winning elections period. You cast your fate with the statists like McCain and the GOP generally, you deserve whatever you get.” (full text here)

Paul Krugman’s take. Megan McArdle’s two cents. Bryan Caplan here. Excellent recipe for corndogs.

Here is a “looking back” piece on the disaster that almost derailed the opening of UC Irvine’s new law school. I don’t know how much press this got around the country, but it was front-page stuff for us out here in Irvine for weeks. In a nutshell, UCI hired Erwin Chemerinsky as the new dean, succumbed to political pressure and unhired him, then succumbed to political pressure again and rehired him. Off to a flying start, I would say.

Here is the UCI Chancellor’s original explanation for unhiring him. Here is more about him being rehired. Here is more on the faculty that have been hired at UCI. I have spoken briefly with one of the new faculty members at the law school, and and handful of other folks I know (including past students of his) speak very highly of him.

Oftentimes, simply letting Father Adam speak is the most effective way of making an economic argument:

What is the species of domestick industry which his capital can employ, and of which the produce is likely to be of the greatest value, every individual, it is evident can, in his local situation, judge much better than any statesman or lawgiver can do for him. The statesman, who should attempt to direct private people in what manner they ought to employ their capitals, would not only load himself with a most unnecessary attention, but assume an authority which could safely be trusted, not only to no single person, but to no council or senate whatever, and which would nowhere be so dangerous as in the hands of a man who had folly and presumption enough to fancy himself fit to exercise it. (The Wealth of Nations, Vol. 1, p. 456)

That is how Peter the Austrian lets it roll today. He also said:

Government can throw money at this problem, but government planning cannot FIX this problem. Intentions do not equal results in economic policy, but that is what the administration is going with here…You have to demonstrate the “can” even if one for the sake of argument grants the “ought”. In this instance, government officials have not justified either the “ought” or the “can”…VOTE NO — and save us from this madness. Will this result in a deeper recession right now — YES, but is that the right thing for government to do…To try to throw money at a problem that was caused by a system of incentives that said we will bail you out when your risky investments go sour is merely to reinforce the perverse incentives that caused the problem in the first place…(full text here).

The rest of the post is great–and reflects basically my constant feeling about economic policy in the US: No one is going to listen, but it’s still the right thing to do. Screaming into the wind does get tiring, though.

A couple of days ago I said that the recent teenager-abandoning spree by some parents in Nebraska is the worst thing I’ve heard in a long time.

Alex Tabarrok at MR sees one potential upside.

about the financial crisis? Honestly…I’m a microeconomist, I hate financial economics, I hate macroeconomics, and I suffer from such a ridiculous degree of cynicism and political-institution apathy that it’s almost difficult to converse with me at times.

I’ve always (at least since I started studying economics) been asked fairly often what I think about the national economy, but over the past couple of months, the frequency has increased dramatically. The frequency is not the only difference though–the meaning behind the questions has changed. It used to be that people would ask out of a need for chit-chat or casual curiosity. It was easy enough then to just toss out a super broad generalization that holds in almost any set of circumstances, or even “I’m not that kind of economist” and let it go at that. Now, however, there seems more often than not, to be a deeper level in interest in people when they ask me about the economy–almost a sense of concern or worry about things.

I want so badly to stop paying attention to the financial sector and go back to not caring about the LIBOR or the NAIRU, but as an economist, I feel some inherent obligation to understand the whole thing well enough to be capable of explaining it to literature majors.

Do other economists feel this way? Almost all of the other economists I know hate macro, too, and so we rarely talk about this kind of stuff when we’re together unless we’re forced into it. I don’t know.

From the Ron Paul campaign website (thanks to Shumster for the tip)

My Answer to the President

Dear Friends:

The financial meltdown the economists of the Austrian School predicted has arrived.We are in this crisis because of an excess of artificially created credit at the hands of the Federal Reserve System. The solution being proposed? More artificial credit by the Federal Reserve. No liquidation of bad debt and malinvestment is to be allowed. By doing more of the same, we will only continue and intensify the distortions in our economy – all the capital misallocation, all the malinvestment – and prevent the market’s attempt to re-establish rational pricing of houses and other assets…(continue reading here).

I’m curious as to why most of the major Econobloggers seem unwilling to respond to Ron Paul’s commentary on the economy of late (more commentary from RP here). About all I can find is this from MR, and a linked response from Peter Boettke, another George Mason economist. Of course, having listened to Boettke gush in person about Mises (whose monetary policies RP advocates), I know his viewpoint will certainly be favorable, to say the least.

mean that I don’t have to see any more of their preachy, hypocritical TV ads?

Since most economists don’t do the kind of heroic stuff that usually gets my attention, I don’t have many econ man-crushes.* The closest I’ve got–you may have guessed from a post a couple of days ago–is Greg Mankiw.

As his recent post points out, he hasn’t really said much about the financial crisis in terms of what he actually thinks. Until now:

What is my opinion about all this? I am of two minds about the complex situation we find ourselves in.
On the one hand, I share many of the concerns of the letter signers and other critics of the Treasury plan.
On the other hand, I know Ben Bernanke well. Ben is at least as smart as any of the economists who signed that letter or are complaining on blogs or editorial pages about the proposed policy. Moreover, Ben is far better informed than the critics. The Fed staff includes some of the best policy economists around. In his capacity as Fed chair, Ben understands the situation, as well as the pros, cons, and feasibility of the alternative policy options, better than any professor sitting alone in his office possibly could.
If I were a member of Congress, I would sit down with Ben, privately, to get his candid view. If he thinks this is the right thing to do, I would put my qualms aside and follow his advice.

Despite my own misgivings, this subtle rebuke of all the econobloggers has a definite air of wisdom, and seems far more reasonable and cool-headed than anything else I’ve read to-date. The Man(kiw) has spoken; the remaining question for me is whether or not what Bernanke says in the media is “his candid view” or not.

UPDATE:
A response to Mankiw’s response about Mankiw’s non-responsiveness.

*My true Man-Crush is well-documented.