Sunday, August 22, 2010

This would be “A Fortunate Experiment”

“So the Obama administration removed from the Department of Labor’s website that agency’s study that found differences between women’s and men’s pay as resulting, not from discrimination, but from different career choices made by each sex (“Gender pay gap reflects choices, not bias,” August 21).  Big deal.  Politically opportunistic fact-filtering is a bi-partisan tradition as newsworthy as mosquitoes in summer.

But to those persons who believe that women are indeed consistently underpaid, boy do I have a deal for you!  Start your own firms and hire only women.  If it’s true that women are consistently underpaid, you’ll be able to hire outstanding employees by paying them more than the relative pittances they currently earn, while you still profit handsomely from employing them.

And that’s not all.  Being benighted male chauvinists, your competitors will not follow your example; they will stubbornly refuse to offer female employees wages commensurate with these women’s productivity.  You’ll expand your operations by easily hiring highly productive, formerly underpaid workers while your competitors – made stupid by prejudice – will shrivel into bankruptcy as they lose productive employee after productive employee.  You’ll simultaneously corner your industry’s market, earn handsome profits, and raise women’s wages.  If you’re correct that sex discrimination is rampant in today’s labor market, you can’t lose!  So get to work!”

Don Boudreaux – again!

Friday, August 20, 2010

What’s to be scared of in economics?

Trying to encapsulate my views on economics and policy in a short sentence or two for a friend I have managed this so far….

“The notion that we tend to strive for a little more of what we like and a little less of what we don’t, and that in the process, for the most part society is better off as a result – which to me is the guts of economics – does not seem so difficult, nor threatening that it could ever be usefully supplanted by the call to coercion.”

Saturday, August 14, 2010

The need to be camera shy

Stephen Joyce should be utterly ashamed. He knows better…. Or does he? The efficiency effects of taxi camera coercion are obvious. Perhaps the equity effects aren’t?

So regardless of how this is done, prices to consumers ultimately go up. Industry sources tell me the cost to drivers will be around $6,000 to $7,000 per camera. People who can’t see that this ultimately winds up with the consumer are still in some flat earth brigade. Likely equity effects include more cost for:

§ All disabled people who depend on taxis for transport

§ Kids whose safety is ensured by taxiing not walking

§ Women who ought to taxi not walk home

§ Ditto elderly people

§ Beneficiaries who use taxis for essential transport.

And even on the supply side:

§ The taxi drivers who can least afford this are poor taxi drivers

§ Many are immigrants

§ Many are doctors, surgeons and the like which other regulations here prevent working

§ Many are not young rich but old relatively poorly off drivers

So a bunch of costs incurred for suppliers and consumers for a possible – and it’s only a potential not a guaranteed gain of maybe lowering levels of taxi driver assault. Even over the ditch the experts agree they are unsure whether it has helped.

Notice that the costs above are absolutely certain. The gains are a maybe.

There are literally millions – yes millions – of safe cab trips taken every year. We have had a spate of bad assaults and deaths. No one denies that or the tragedy. There are though far better local, individually generated solutions.

This is a poor response to interest group lobbying which hurts consumers – the least able to cope consumers at that – in the interest of baby kissing and looking like a “tough boy”.

Stephen Joyce – FAIL.

Sunday, August 8, 2010

A Wise Passage


From Paul Seabright, via Peter Gordon:

Politicians are in charge of the modern economy in much the same way as a sailor is in charge of a small boat in a storm. The consequences of their losing control completely may be catastrophic (as civil war and hyperinflation in parts of the former Soviet empire have recently reminded us), but even while they keep afloat, their influence over the course of events is tiny in comparison with that of the storm around them. We who are their passengers may focus our hopes and fears upon them, and express profound gratitude toward them if we reach harbor safely, but that is chiefly because it seems pointless to thank the storm. (p. 25)

Courtesy of Greg Mankiw