tag:blogger.com,1999:blog-17232051.post1206295904064022167..comments2024-03-28T03:16:14.104-04:00Comments on Noahpinion: Do feathers fall as fast as iron balls?Noah Smithhttp://www.blogger.com/profile/09093917601641588575noreply@blogger.comBlogger25125tag:blogger.com,1999:blog-17232051.post-62812829603767712572016-06-17T07:43:14.631-04:002016-06-17T07:43:14.631-04:00Josh: "The only positive (“what is”) stateme...Josh: "The only positive (“what is”) statement that we can make about price controls is that they reduce efficiency."<br /><br />I think there are two positive statements about price controls: (1) If effective, they reduce economic efficiency; (2) If they're NOT effective (i.e., a minimum wage of $9/hour when the equilibrium wage is $11.50/hour), they have no effect on efficiency (assuming the other assumptions of competitive markets hold - and, as Shakespeare noted, "Aye, there's the rub.")Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-17232051.post-581183825289140072016-06-06T19:58:24.193-04:002016-06-06T19:58:24.193-04:00"have to look at a complete economic system&q..."have to look at a complete economic system"<br /><br />What is the impact of minimum wage hikes on commercial rents anyway?Francishttps://www.blogger.com/profile/18057569048356123947noreply@blogger.comtag:blogger.com,1999:blog-17232051.post-85559286207662008062016-06-06T18:18:14.661-04:002016-06-06T18:18:14.661-04:00Tell me more about these literary tomes from which...Tell me more about these literary tomes from which I can divine economic wisdom.... Adamhttps://www.blogger.com/profile/00848821084269314215noreply@blogger.comtag:blogger.com,1999:blog-17232051.post-8837936646328040842016-06-06T18:16:09.872-04:002016-06-06T18:16:09.872-04:00Noah definitely comes out best in this debate. I w...Noah definitely comes out best in this debate. I went the whole hog and got my BA in econ, and so now in work when I have to evaluate a policy the first step is to consult the theory (externalities from an activity? perhaps there are policy implications!). Next up is a look at the literature and eventually obtaining data and doing the ground work to see how the empirics actually match up.<br /><br />Given that many students never go beyond Econ101, it seems bizarre that the attitude to teaching this class comes down to "Hey, it's good for getting the students thinking about things in the right way". Particularly as students don't seem to start thinking "the right way", but instead internalise the information they get about the minimum wage, externalities etc.<br /><br />Personally Econ101 wasn't exactly mentally taxing or time consuming, surely highly academics could strive for teaching a little more than what can be learned from a set of Youtube videos from bloody LibertyPen? Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-17232051.post-32158933954569441142016-06-06T16:37:19.518-04:002016-06-06T16:37:19.518-04:00Noah,
I recommend Rick Stryker's first two co...Noah,<br /><br />I recommend Rick Stryker's first two comments in the econbrowser post you mention, right at the top. Then read their continued debate in the following: http://econbrowser.com/archives/2014/03/faith-and-econometrics-minimum-wage-edition<br /><br />Stryker makes very good arguments against that funnel plot.<br /><br />Warm regards,<br /><br />IlyaJoeMachttps://www.blogger.com/profile/12650518988624821388noreply@blogger.comtag:blogger.com,1999:blog-17232051.post-74344199797659894202016-06-06T16:23:45.606-04:002016-06-06T16:23:45.606-04:00luddupluddupAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-17232051.post-84637666802339382722016-06-06T13:03:22.668-04:002016-06-06T13:03:22.668-04:00When you see a new set of data, you apply the simp...When you see a new set of data, you apply the simplest and most parsimonious thing you have. If you want to overturn those laws by invoking special mechanisms, you better have strong evidence for them.<br /><br />In case you don't see it, let me say this: weak response to weak treatments is not evidence for basic laws not working, especially for large treatments.Krzyshttps://www.blogger.com/profile/15794655390770135247noreply@blogger.comtag:blogger.com,1999:blog-17232051.post-19528025775341333882016-06-05T20:19:51.911-04:002016-06-05T20:19:51.911-04:00The feather and iron bask metaphor us just too per...<i>The feather and iron bask metaphor us just too perfect. You are trying to argue that because empirics clearly indicate otherwise, we have overturned newton's laws.</i><br /><br />Not at all, just showing that when you <i>apply</i> Newton's laws, you have to be careful to pick your examples so you don't get laughed at.Noah Smithhttps://www.blogger.com/profile/09093917601641588575noreply@blogger.comtag:blogger.com,1999:blog-17232051.post-28756492653562530312016-06-05T19:46:25.395-04:002016-06-05T19:46:25.395-04:00What do you think they're rebelling against?What do you think they're rebelling against?Noah Smithhttps://www.blogger.com/profile/09093917601641588575noreply@blogger.comtag:blogger.com,1999:blog-17232051.post-87049103994110742822016-06-05T17:55:55.786-04:002016-06-05T17:55:55.786-04:00Just to clear up the dissonance of Josh being both...Just to clear up the dissonance of Josh being both a rebel econ professor and an everyday economist...his school's team name is the "Ole Miss Rebels".Anonymoushttps://www.blogger.com/profile/02346818846281177599noreply@blogger.comtag:blogger.com,1999:blog-17232051.post-39817088591897420862016-06-05T17:09:46.558-04:002016-06-05T17:09:46.558-04:00Well,
showing that there are competing concerns ...Well, <br /><br />showing that there are competing concerns with other normative standards doesn't quite show the concept of efficiency to be non-normative. In fact, one could argue that only normative concepts could actually compete with each other. And those other concerns you name, Noah, could be shown to be non-normative as well: showing what justice is doesn't tell someone to be just and showing to someone what virtuousness is doesn't tell them that they ought to be virtuous. (Although I know that there are philosophers who would disagree with that). Then we have come full circle, because now we could say that none of the concepts we use in our evaluative talk have any normative meaning.<br /><br />On the other hand, efficiency is the usual basis for most of the prescriptive judgements economists make. We evaluate policy alternatives on the basis of it. There are other standards that can be brought in, but as I pointed out, they are normative, too. And im not sure Josh would actually claim that in his policy prescriptions efficiency shouldn't matter, because it's a positive concept. That would disqualify everything economists would have to say as they are saying it.And I would like to see an economist, who - without any problem - can say the following sentence:<br />The only good thing that we can say about price controls is that they reduce efficiency. Because efficiency is a bad thing.FSnoreply@blogger.comtag:blogger.com,1999:blog-17232051.post-3710713226274113502016-06-05T17:08:32.042-04:002016-06-05T17:08:32.042-04:00Newton thought that energy increased linearly with...Newton thought that energy increased linearly with the speed. Energy increases with the square of the speed. A couple of hundred years ago physicists conducted experiments to see who was right. You go twice as far when you go twice as fast. :-) Denis Drewhttps://www.blogger.com/profile/11833367196756465896noreply@blogger.comtag:blogger.com,1999:blog-17232051.post-6688898504911216462016-06-05T16:21:08.644-04:002016-06-05T16:21:08.644-04:00The feather and iron bask metaphor us just too per...The feather and iron bask metaphor us just too perfect. You are trying to argue that because empirics clearly indicate otherwise, we have overturned newton's laws. Krzyshttps://www.blogger.com/profile/15794655390770135247noreply@blogger.comtag:blogger.com,1999:blog-17232051.post-49191034727516556312016-06-05T12:43:49.908-04:002016-06-05T12:43:49.908-04:00Here's a little missing dimension on the minim...Here's a little missing dimension on the minimum wage so-called cost/demand curve:<br /><br />If the min wage hike is priced right it could bring in more overall income to min workers for fewer hours of work -- the first week. Those extra dollars _would have been spent_ proportionately more at firms employing higher wage workers -- by definition -- possibly causing job losses there.<br /><br />Come first pay day for newly flush min wage workers those dollars will be spent where they wish -- instead. Since folks tend to spend proportionately more at firms employing similar wage level workers, min wage employment could plausibly increase.<br /><br />Which is exactly what Card and Krueger found in their seminal study. The hike may have caused unemployment but everybody's looking in the wrong place for it. :-O<br />*******************<br />PS. According to John Archibald Wheelers' Sci Am book, A Journey into Gravity and Spacetime, the earth is pulling on space and space is pulling on the object -- why anything falls the same speed as anything else.<br />********************<br />May as well throw in another interesting labor market missing dimension:<br /><br />In a labor market that contains (for the sake of argument 50% rich country workers (e.g., American born) and 50% poor country workers (must be something like Chicago which is 40% white, 40% black, 20% Hispanic) ...<br />... where pay is set by what I call "subsistence-plus"; meaning set STARTING at the absolute minimum pay workers will tolerate (e.g., $800/wk for American born taxi drivers [me]; $400 for foreign born) and then PLUS some more for each additional level of skill (bottom for McDonald's, more for better English in Starbucks, more for college English and more competent organizing in Whole foods?) ...<br />instead of pay set by the highest price the consumer is willing to pay -- by collective bargaining or a minimum wage ...<br />... a huge dropout of low skilled, rich country workers will occur (the labor market will not clear). E.G., American born taxi drivers (me again) and the Crips and the Bloods. How else explain that 100,000 out of my guesstimate 200,000 Chicago, gang-age males are in street gangs?<br /><br />Now here's the wind-up -- that should implant permanently the unquestionable need for collective bargaining in all labor transactions:<br />A what I call subsistence-plus labor market with 100% rich country workers will have lower pay levels than a collective bargaining labor market with 50% rich/50% poor country workers.<br /><br />That's the whole law and the profits about the need to make union busting a felony (starting in progressive states) as far as I'm concerned.Denis Drewhttps://www.blogger.com/profile/11833367196756465896noreply@blogger.comtag:blogger.com,1999:blog-17232051.post-74207507566387414132016-06-05T12:23:34.296-04:002016-06-05T12:23:34.296-04:00The concept is fine, I guess. The word is a scam. ...The concept is fine, I guess. The word is a scam. It reminds me a bit of Mark Halperin saying Trump is not racist because Mexicans are not a race. <br />Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-17232051.post-87482984304095366402016-06-05T07:34:09.693-04:002016-06-05T07:34:09.693-04:00Presumably he's talking about the Trock genre,...Presumably he's talking about the Trock genre, or Time Lord Rock, which is a form of filk music dedicated to the Dr. Who fandom.<br /><br />https://en.wikipedia.org/wiki/Time_Lord_rock<br /><br />From a standpoint of writing objective history, I suppose a side effect of having a dapper British Gent with a phone booth and a photogenic young British girl rampaging around the timeline would be a state of Permanent Kuhnian Revolution among historians, as it would be equally accurate/inaccurate to describe the causes of any historical development before and after the side effects of the latest temporal paradox.<br /><br />Google is freely available and works for everyone, Noah, there's no excuse for this sort of lack of journalistic due diligence. :p<br /><br />(Alternately, Anonymous may be Gene Ray of TimeCube.com, come to warn of the importance of maintaining a stable planetary orbit in the face of constant Time Lord interference.)JJFhttps://www.blogger.com/profile/11948014831964413383noreply@blogger.comtag:blogger.com,1999:blog-17232051.post-25477997120280052502016-06-05T05:18:17.825-04:002016-06-05T05:18:17.825-04:00100% agree.100% agree.Noah Smithhttps://www.blogger.com/profile/09093917601641588575noreply@blogger.comtag:blogger.com,1999:blog-17232051.post-28959817030066775472016-06-05T05:13:19.991-04:002016-06-05T05:13:19.991-04:00I come down much more on Noah's side of this d...I come down much more on Noah's side of this debate. The costs of having a lot of econ 101 educated people (who never went further) maintaining these models in their heads, under the assumption they are true, are high. It has a real impact on how people see the world and the decisions they make. The best presentation of these models to me would be one of: 1) here's the theory and implications 2) here's what the research says 3) they are very different--keep doing econ and you'll (maybe) learn why. Anonymoushttps://www.blogger.com/profile/02185569630536717943noreply@blogger.comtag:blogger.com,1999:blog-17232051.post-2153606530275341022016-06-05T04:33:10.512-04:002016-06-05T04:33:10.512-04:00Economists use "normative" to mean "...Economists use "normative" to mean "prescriptive". Telling people what will maximize efficiency doesn't tell them that they <i>ought</i> to maximize efficiency, because there are often other competing concerns, like welfare (or virtue, justice, or cute videos of cats licking rabbits, etc.).Noah Smithhttps://www.blogger.com/profile/09093917601641588575noreply@blogger.comtag:blogger.com,1999:blog-17232051.post-20539820116031348712016-06-05T03:09:21.130-04:002016-06-05T03:09:21.130-04:00I didn't know that efficiency is an non-normat...I didn't know that efficiency is an non-normative concept. But you never stop learning, especially in Econ101.FSnoreply@blogger.comtag:blogger.com,1999:blog-17232051.post-37826358027984391562016-06-05T01:05:05.040-04:002016-06-05T01:05:05.040-04:00I think your feather and iron ball example is exce...I think your feather and iron ball example is excellent. Even when there are very simple physical laws involved, it isn't always easy to predict the results. Some years back a friend of mine worked on a training system for the Navy. The idea was to embed the knowledge necessary to teach someone how to start the engines on a capital ship. The simulation started with what they called "cold iron" and the goal was to get the engine idling. It sounded really simple. All you had to do was start the car so to speak, but the actual scenarios that emerged had increasing the boiler heat leading to a cold engine and circulating cold ocean water leading to overheating. As a training system, it had to deal with all these weird cases and help the student figure out what was going wrong and how to get it right.<br /><br />Econ 101 has a bunch of simple forces involved, but real economic systems are much more complicated. There are almost always some weird dependencies that lead to the unexpected. If you want to look at the effect of something as simple as raising the minimum wage or setting a price ceiling, you have to look at a complete economic system. I'm not even sure that the traditional Econ 101 supply-demand curves are useful for doing this. It might be more useful to teach some very basic accounting and doing simple simulations, the kind that can be done in a spreadsheet. If nothing else, students could see how economic forces lead to economic decisions that in turn produce economic forces. <br /><br />In a way, simple supply-demand curve thinking is pernicious. Those curves are not basic. They are emergent, and they don't emerge from a vacuum. It would make much more sense to think in terms of economic entities and the fact that there is no such thing as an economy of one.Kaleberghttps://www.blogger.com/profile/05283840743310507878noreply@blogger.comtag:blogger.com,1999:blog-17232051.post-63226153629018237102016-06-04T21:59:00.387-04:002016-06-04T21:59:00.387-04:00But is Econ 101 really worth defending? We know it...But is Econ 101 really worth defending? We know it's next to useless to explain how prices are set (read: Alan Blinder's work for that). Rent controls = bad (or inefficient) are something that is almost unanimous among economists, but are they correct on this, and why is the evidence nearly non-existent on this, and when it's there, often shows the reverse (and why are Urban policy people so adamant on it)?<br />https://psmag.com/in-defense-of-rent-control-3cb453119116#.q1ubc6no7<br /><br />I mean no doubt econ 101 is a particular way of looking at the economy - but is it the correct way of looking at the economy, or is it just an ideological lens with which to look at the economy? As you said, the labor market rarely works the way 101ers would suggest, particularly with immigration.<br /><br />The better question is: when is 101 a good explanation of what happens in the economy with a solidly empirical backing?Kainhttps://www.blogger.com/profile/09841689865415250256noreply@blogger.comtag:blogger.com,1999:blog-17232051.post-47092114670677232242016-06-04T21:00:39.385-04:002016-06-04T21:00:39.385-04:00I guess Mao was rather Stalinist than Trotskyite t...I guess Mao was rather Stalinist than Trotskyite though his formula "Bombard the Headquarters" during the Cultural revolution can be viewed as Trotskyist.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-17232051.post-966292058535243822016-06-04T20:45:58.214-04:002016-06-04T20:45:58.214-04:00Is that like Tronc?Is that like Tronc?Noah Smithhttps://www.blogger.com/profile/09093917601641588575noreply@blogger.comtag:blogger.com,1999:blog-17232051.post-85194650485779205062016-06-04T20:44:44.844-04:002016-06-04T20:44:44.844-04:00Perpetual Revolution is Trockizm.Perpetual Revolution is Trockizm.Anonymousnoreply@blogger.com