Happy New Years

No post today, enjoy your New Years…

Mike Moffatt has some ideas on how Economics can help with your New Years…

Check it out here.

See you in 2008…

Published in: on December 31, 2007 at 8:53 pm  Leave a Comment  

Could have been worse…

The Financial Times reports:

"China is to introduce taxes on grain exports in the latest attempt to rein in food-driven inflation that reached an 11-year high in November.

Exporters of 57 types of grain, including wheat, rice, corn and soya beans, will have to pay temporary taxes of between 5 and 25 per cent, the country’s Ministry of Finance said on Sunday."

This is basically a reverse tariff to keep food inside the border. This obviously makes it more profitable to sell their grains domestically.

I guess it could have been worse we could be looking at price controls, which would cause many people to starve.

Still isn’t good because it is going to force businesses to go against market forces…

Published in: on December 31, 2007 at 5:19 am  Leave a Comment  

Issues Poll Results…

Two way tie with Abortion and the Iraq War

Then another two way tie between Taxes and Enviroment

And the three way tie between Healthcare, Social Security, and Immigration

No one voted for Guns, Energy, Crime, Education, Trade, or Gay Marriage…

So the new poll is who will win Iowa for the Republicans…

Published in: on December 30, 2007 at 11:19 pm  Leave a Comment  

Bush saved the legal system…kind of

This from the Financial Times:

"At the centre of the administration’s latest spat with Congress is section 1083 of the Defense Authorisation Act, a measure that would allow American victims of state-sponsored terrorism the right to sue countries and, according to the White House, would allow plaintiffs’ lawyers to freeze assets in the amount of damages claimed in their lawsuits."

He vetoed this bill even though it was a $700 billion dollar budget for the Department of Defense.

Victims of state sponsors of terrorism deserve a lot but when it comes to suing them that would not be good at all.

We already have tort problems like the guy who sued a gun company because he filed down the trigger and shot himself when he hit a bump driving off road trying to shoot a deer.

This would mean every American could have some reason to sue a country that is a state sponsor of terrorists.

This would clog our court system and put any lawyer in an awkward situation in America.

Published in: on December 30, 2007 at 6:30 am  Leave a Comment  

How to fix traffic problems…

Studies show that the people who spend the most on car insurance, as in getting more options, are involved in the least amount of accidents. While the people who do not spend hardly any money or sometimes none get involved in the most accidents.

This is because one group is responsible and the other is not.

We have also seen an increase in accidents since airbags, because people feel safer and become more careless shifting their "thought consumption" somewhere else. George Mason’s own, Gordon Tullock, once said that if you want people to drive safer replace the airbag with a dagger.

So western part of Germany is taking some of this advice, this from the Washington Post:

"The usual remedies — from safety crossings to speed traps — did no good. So the citizens of Bohmte decided to take a big risk. Since September, they’ve been tearing up the sidewalks, removing curbs and erasing street markers as part of a radical plan to abandon nearly all traffic regulations and force people to rely on common sense and courtesy instead."

Is this going to work? This is raising the costs of moving your "thought consumption" to other things. That is exactly what they want to do:

"Generally speaking, what we want is for people to be confused," said Willi Ladner, a deputy mayor in Bohmte. "When they’re confused, they’ll be more alert and drive more carefully."

The hardest thing will be the readjustment period…

It is something you expect whenever you deregulate anything.

Published in: on December 29, 2007 at 5:11 am  Comments (1)  

Google Old School

Funny thing I saw today…


Published in: on December 28, 2007 at 8:09 pm  Leave a Comment  

Civilization Take Two…

So how would human act if we started over from scratch?

This is what new virtual worlds are doing on the Internet.

The Economist did a report on technology and this is what they said:

“Before long the first settlers move in and start to look for ways to make a quick buck. Their success attracts more settlers, and unruly bonanza ensues; finally the policemen, lawyers, and tax collectors show up.”

There you have it folks, this is how civilization got us to where we are.

Some companies are using these to come up with real-world solution in the areas of health-care, military training, management, and other things.

Funny thing is that gamers are reporting feeling hassled by all the “legal issues.” Some players have even been banned for some real-world issues like child molestation.

Government started when a bully decided to make someone else do all the work. It was probably very mafia like.

  • They kept other bullies from hurting their slaves – National Security
  • They kept slaves from fighting and stealing from each other – the Police
  • They settled amicable disputes – Court systems

There you have it and a government is formed. So the question is how do we take something that was formed through slavery and violence and turn it into a productive beneficial tool.

Remember the government doesn’t give you rights, the government is put in place to protect peoples rights that are natural.

Published in: on December 27, 2007 at 5:12 am  Comments (2)  

Will we even have land lines in the Future?

As technology increases and cell phones become more dependable are we going to eliminate the demand for land lines?

This from the AP:

"The most recent government data show that households spent $524, on average, on cell phone bills in 2006, compared with $542 for residential and pay-phone services. By now, though, consumers almost certainly spend more on their cell phone bills, several telecom industry analysts and officials said."

I know many people who do not have land lines at all. Even when I went the other day to get a haircut her line was a cell phone and she told me that she even has hold music.

This is called an inferior good which means as people’s incomes increase their demand declines for that good. In this case it is land lines.

Another example would be Spam when people are poor they demand more Spam than when they are rich.

Published in: on December 26, 2007 at 5:09 am  Leave a Comment  

Merry Christmas

Milton Friedman Greyscale 

Merry Christmas to all my readers…

As you open your gifts on this largest consumer based economic day of the year, think about this quote:

"Many people want the government to protect the consumer. A much more urgent problem is to protect the consumer from the government." ~Milton Friedman

What does this mean to you? Do you think the free market will weed out bad producers? Like the factories in China and the lead toys…

That’s it enjoy your families….

Published in: on December 25, 2007 at 5:12 am  Comments (1)  

Confession of an Economic Mind that was reading…

Confessions of an Economic Hit Man by John Perkins

I just finished this book and I was interested in this because Mr. Perkins was an "Economist" for a company and had a story to tell.

His story is about how he went to developing countries and projected economic growth of certain projects. In the cases that he mentions are an electrical grid and hydro-electric dam.

When he went there he claims that he worked for corporations but he was working the government’s agenda. He completely turns his back on capitalism and sides with leaders who he considers not to be communist but probably borderlined socialist.

My favorite quote that summed up his attitude is:

"We prefer to believe the myth that thousands years of human social evolution has finally perfected the ideal economic system, rather than face the fact we have merely bought into a false concept and accepted it as gospel. We have convinced ourselves that all economic growth benefits humankind, and the greater the growth, the more widespread the benefit."

It is a shame that this man never met Milton Friedman. I would have paid money to see this guy get ripped a new one.

Sure this man had first hand experience making these deals, but how could you argue that these places are not better off with economic growth. He calls it corportacracy and that only the corporations benefit from these deals.

They benefit but there is no one that is being forced into these deals. They want the modernization. Not all of them but like him these people are anti-globalization and do not want change. You would say the same thing about the buggy-maker. He isn’t complaining anymore now we have cars.

It is possible that we did not take the precautions we did and it is possible that some people may have been exploited, but this is not a problem with the corporations this is a problem with the government and legal systems. It is like what my professor once said about the environment and whaling. There is no benefit in letting a whale go because someone else will come on a hour later and kill it. This creates an incentive for whaler to not be environmentally friendly but create property rights. Just like when they may have built a dam where a tribe was. They should have given the property to the tribe and if they wanted the dam then they could say yea or nay if they didn’t.

If the land was common land then it was fair game and it shouldn’t have been. Mr. Perkins would blame the corporations and then say the government is putting this country is in debt to always have control over it.

The problem with that is that debt doesn’t seem to work or all these ‘dictators’ that we supported during communism would be falling to our knees. He also proves himself wrong by talking about how when Iran had its revolution that he was warned not to invest. This is because the new government wouldn’t pay them.

My question to Mr. Perkins is what stopped Panama and Ecuador from not repaying?

I do not recommend this book, for I believe that if he had facts that we could argue against then it would be no matter what side he was on. He spends a lot of his time discussing his opinion and he assumes that you agree and he is fueling your fire. I decided to skip the epilogue because it was about how to "get active."

When he said that Saddam saved Hugo Chavez from getting invaded, he lost me for good…

This book receives a 1 out of 10

Published in: on December 24, 2007 at 5:17 am  Leave a Comment