Archive for the ‘Political Economy’ Category

the new barter economy

Saturday, April 21st, 2018

FT columnist Gillian Tett explains, very well and concisely, that the ‘free’ services that internet companies provide in exchange for our personal data is the age-old system of barter. This system is difficult for economists to understand, because prices, measured in money, are absent. (more…)

multilateralism, rules, and their demise

Thursday, April 5th, 2018

FT columnist Philip Stephens has written an excellent column on the sad state of world affairs. Here are a few excerpts from it. Click on the link below to read the full column. (more…)

the real cause of trade deficits

Wednesday, April 4th, 2018

In an FT column, Megan Greene provides an excellent, concise explanation of why the US has a large trade deficit, and why tariffs on trade will not reduce it. President Trump should read this before his trade war harms the US and its trading partners. This is Economics 101, understood by nearly all trained economists but difficult for non-economists to understand. (more…)

a dining room set for Ben Carson

Wednesday, February 28th, 2018

US Republicans portray themselves as conservative, but in office they are not frugal, and show little concern with deficit spending that benefits them and the wealthy. Here is an example, from a department entrusted with the task of providing housing for low-income citizens.

The Department of Housing and Urban Development spent $31,000 on a custom hardwood table, chairs and hutch for Secretary Ben Carson’s office, records show.

The purchase in late 2017 came at the same time as plans to cut department programs for the homeless, elderly and poor. Mr. Carson “didn’t know the table had been purchased,” but does not intend to return it, a spokesman said.

On a tour of facilities for the poor last year, Mr. Carson warned of the effects of providing “a comfortable setting” for those on government assistance.

“Morning Briefing”, New York Times, received by email the morning of 28 February 2018. The briefings are archived at this link.

the economics of happiness

Friday, January 26th, 2018

Economists continue to study happiness, and new research appears frequently. FT undercover economist Tim Harford faces this question head-on, asking whether the pursuit of wellbeing should guide government policy and, if so, how should we measure wellbeing. Typically, happiness surveys ask respondents how satisfied they are with life, on a scale of one to ten. Is moving from 3 to 4 the same as moving from 7 to 8 on the scale? And, what does a score of one, five or ten really mean? (more…)

Davos Man and liberal economics

Tuesday, January 23rd, 2018

FT columnist Martin Wolf has written an outstanding essay on the demise of liberal international economics. Here is a brief excerpt from his column.

Many Americans feel they have both less reason and less ability to be generous to erstwhile partners. Among domestic changes, many in high-income countries feel that the liberal global order to which their countries have been committed has done little for them. It is generating, instead, the sense of lost opportunities, incomes and respect. It may have brought vast gains to the sorts of people who frequent Davos, but far less to everybody else. Especially, after the shock of the financial crisis, the tide does not seem to be rising and, if it is, it is certainly not lifting all boats.
(more…)

the genius of Donald Trump

Monday, January 22nd, 2018

I keep promising myself that I will ignore Donald Trump, but am unable to keep my promise. If Mr Trump were just a businessman and reality TV star, I would ignore him and his tweets. But he is the leader of the most powerful nation in the world. What he says and tweets has consequences.

Anyway, FT columnist Gideon Rachman has some thoughts on the intelligence of Mr Trump that I found interesting. Mr Trump is clearly not stupid. He is very bright, but in a political sort of way. He has an uncanny ability to sense that a majority of white Americans are worried that they are becoming a minority in their own country. Moreover, he knows that they have suffered the humility of enduring a black President who was elected by popular vote. In a democracy, with the percentage of white voters falling, it is realistic for them to expect and to fear the emergence of more black and brown rulers in the future. (more…)

racial prejudice and contact with minorities

Wednesday, January 17th, 2018

I recall reading several studies of the US and UK that show a negative correlation between anti-immigrant prejudice and the proportion of immigrants in a community. A new study of the UK by economists from Tilburg University in The Netherlands and the University of Sydney in Australia contributes to this research, and shows that the effects are persistent. Worryingly, though, persistence is weaker in areas that received less subsequent in-migration.

Here is the authors’ conclusion: (more…)

Donald Trump’s path to the presidency

Friday, January 12th, 2018

[David] Frum, a former speech writer to George W Bush and one of the most articulate “Never Trumpers”, asks how a man like Trump could have reached high office in the first place. One answer is that Trump does possess real skills. Among these is an almost diabolical knack for divining other people’s resentments — perhaps because he is riddled with so many of his own. Trump often tries out different applause lines at rallies and sticks with the ones that resonate. Such market testing appears to work. He has an ability to identify with people who feel slighted. [Michael] Wolff describes how … many years ago, Trump was asked to define “white trash”. He replied: “They’re people just like me, only they’re poor.” …. (more…)

Against the Grain

Wednesday, January 10th, 2018

Yale University political scientist James C. Scott has published a fascinating, but controversial book titled Against the Grain. It is the second book by him that I have read, and I confess that it disappointed me. It is too libertarian, too biased for my taste. Not until the last chapter (seven) did his thesis become clear. Here are some brief extracts from the introduction and that final chapter where the author clearly explains his main thesis. (more…)