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Discussion: (25 comments)

  1. Dagbone

    Lots to chew on… thanks for a very fascinating and thought-provoking exchange.

  2. Completely lost in this discussion is the concept of America being a federation of States. Where did we get so lost that a ‘conservative’ think tank doesn’t even remember what it is that they are supposed to be conserving?

    If there had been even a slight hint that perhaps some, if not most, of these programs that are being discussed ought to be handled locally (doctrine of subsidiarity) I might believe that AEI is ‘conservative’. Alas, we are hearing more watered down liberalism and it will lead to the same catastrophic results that have come about *every* time it has been tried in all human history.

    The tragedy is that Jim and Arthur don’t even realize that they are part of the problem. AEI should be talking about a return to federalism when all of these problems were handled far more efficiently and we became the weathiest country in the history of man.

    The problem is the economic black-hole known as Washington DC.

  3. Seattle Sam

    “He understood that that creates a headwind on the economy, but it’s a morally justifiable thing to do.”

    Why is it morally justifiable to reduce the living standards of future generations by reducing economic growth? If our parents and grandparents had taken that approach, our ability today to afford “safety nets” — or anything else– would be far less.

    1. Todd Mason

      So what would it take to bring back the good old days? Based on my grandparents’ experience, the basic ingredients are 160 acres of free land and a limitless demand for labor, supplied at home farm by 11 children, and in crop years cut short by clouds of grasshoppers, by dad and eldest sons traveling west to the Dakota wheat harvests. The house has to be big enough for three generations, You have to be willing to die at home, with or without medical assistance depending on the doctor’s availability. You need land-grant colleges to move the second generation off the farm, Of course in a post agrarian economy, it doesn’t hurt to have a limitless demand for labor. Happily my parents’ America was connected by telephone operators and steam locomotives. Except for the odd Great Depression, it should be fun, eh?

      1. mesaeconoguy

        The good old days can easily be brought back by removing all legislation from 2008 on.

        All of it.

        Then, remove most legislation from 1970 – 2007.

        Then, eliminate every law and regulation passed during the 1930s.

        That would be an excellent start Turd. You will never support that, because you think “someone has to make rules,” forgetting that the majority of this country’s existence took place without much rulemaking at all.

        1. Todd Mason

          You really are an idiot, Mesa. Note the protection here accorded to cheese and butter. http://www.dumblaws.com/laws/united-states/wisconsin

          Crony capitalism is as old as cronies.

          1. mesaeconoguy

            No Turd, as usual, it is you who is the sniveling moron.

            Your answer is to create more rules and opportunity to exploit them, or as you like to put it, “game the system.”

            Nothing an extra layer of complex regulation can’t solve, right Turd?

            Dumbass.

          2. Todd Mason

            That Americans don’t handle moral hazard well is not new either: http://forgottenhistory.blogspot.com/2007/05/boomers-sooners-and-eighty-niners.html

          3. mesaeconoguy

            Oh, that’s right, we’re supposed to “handle” moral hazard.

            Nothing a few extra layers of regulations, expanding moral hazard can’t fix, right Turd?

            Because people don’t respond to incentives, right Turd?

            It’ll be different this time, right Turd?

            God, you’re stupid.

          4. Todd Mason

            Ah yes. Economic Stick Man. Wave a bone in his face and he salivates like Pavlov’s dog.

            Except that he doesn’t. Only a third of Americans age 60 or older who are eligible for food stamps participate. Why? In Las Vegas, according to Zillow, 6.8 percent of homeowners are underwater by 80 to 100 percent (i.e. they owe twice as much as the home is worth.) Yet they keep paying. Why?

            The answer of course is that most humans heed an internal sense of fairness, the result of millennia of selection biased toward cooperation rather than competition.

            There are some notable exceptions:

            “An ironic stidy finds that it is the very act of studying economics that makes people uncooperative in the first place. At that time, by the early 90s, we already knew through surveys that economics professors gave less to charities (compared to professors in other social sciences, mathematics, computer science or engineering); we knew that first year graduate students in economics were more likely to free-ride in experiments; and we also knew that economics students had a hard time describing what fairness even meant.”

            http://www.psychologytoday.com/blog/the-decision-lab/201104/why-does-studying-economics-hurt-ethical-inclinations

            So the next time you blather on about incentives, remember this: We’re not talking about shallow buttholes like you.

          5. mesaeconoguy

            Where do you get this bullshit, Turd?

            “…the very act of studying economics that makes people uncooperative in the first place.”

            Yes, I suppose those of us who have studied economics and understand it would be perceived as uncooperative to those of you who haven’t and don’t.

            Blithering idiot.

          6. Todd Mason

            If you think Economic Stick Man spends 100 percent of his time maximizing his economic interests, you ARE a crackpot.

            If YOU act like Economic Stick Man, having sat through the lectures and absorbed the BS, there is a better than average chance you are appallingly amoral and would be better served to remember your kindergarten teacher. (Behave and you won’t have to sit in time out.) There are few places on earth where business is redder of tooth and claw — and increasingly more heavily regulated. These are related phenomena.

          7. mesaeconoguy

            I’m reasonably certain your knowledge of business, economics, regulation, and morality fits on about 1/4 of a page.

            You can shove your economic ignorance right back up your ass, from whence it issued forth.

          8. Todd Mason

            Harvard’s Amartya Sen: “The nature of the present economic crisis illustrates very clearly the need for departures from unmitigated and unrestrained self-seeking in order to have a decent society.”

            Kenneth Boulding on the Pareto efficiency, the notion that you can’t make one person better off without making someone else worse off.

            “The more one examines it, for instance, the more clear it becomes that economists must be extraordinarily nice people even to have thought of such a thing, for it implies that there is no malevolence anywhere in the system. It implies, likewise, that there is no benevolence, the niceness of economists not quite extending as far as good will.

            It assumes selfishness, that is, the independence of individual preference functions, such that it makes no difference to me whether I perceive you as either better off or worse off.

            Anything less descriptive of the human condition could hardly be imagined. The plain fact is that our lives are dominated by precisely this interdependence of utility functions which the Paretian optimum denies.

            Selfishness, or indifference to the welfare of others, is a knife edge between benevolence on the one side and malevolence on the other.”

            Awaiting now, Mesa’s standard “No, yo mama.”

          9. mesaeconoguy

            Pure bullshit. Is that what you think passes for economics Turd?

            The premeses of your above vacuous commentary (particularly the Harvard ignoramus) are false – in the case of the financial crisis, it was a failure of regulators, regulation, and government, not private actors. While there certainly are bad actors in all industries, what the financial meltdown definitely demonstrated that mass incentivized risk-taking coupled with poor and misaligned regulatory and governmental policies can be disastrous.

            The rest of it is meaningless drivel.

            Try again, Turd.

          10. Todd Mason

            Q How many Austrian economists does it take to screw in a lightbulb?
            A Both of them.

          11. mesaeconoguy

            Q: How can you tell Turd has exhausted his extremely shallow and limited knowledge of economics?

            A: When he starts posting asinine quips on he thinks are funny.

          12. Todd Mason

            Oh, I have lots to say but, to restate the loss aversion work in Kahneman’s prospect theory, Mesa sticks with his dumb*ss ideas to avoid admitting a mistake.
            To answer the question I posed above, and that Mesa studiously avoids — why would a Las Vegas homeowner keep paying off negative equity at 50 percent or more of the home’s current value — we’d turn first to sunk cost fallacy. (I have too much invested to walk away.) Kahneman helps too. (But taking a loss is so … final.) And mailing the keys to the lender is a breach of honor that is troubling to most people, The upshot is utility function is completely out the window in negative equity, We do not always act to maximize out economic interests because we are fallible irrational humans.

          13. mesaeconoguy

            Yes Turd, we know you have lots to say, but none of it is economically relevant, so feel free to officially shut the fuck up.

            Have a wonderful weekend. 

          14. Todd Mason

            A financial adviser, as Mesa claims to be, who has no understanding of behavioral finance, is a menace to his clients.

          15. mesaeconoguy

            I see Turd didn’t accept my invitation.

            A developer which Turd appears to be with zero economics knowledge is a parasite, along with his entire family.

          16. Todd Mason

            Not a developer, but you have to admire people who look at dirt and see opportunity. Contrast that with Mesa, who can look at anything and see sh*t.

  4. So much to think about. Great interview by Jim, great answers by Arthur.

  5. juandos

    ’m a behavioral economist, which means I look at all kinds of traditionally non-economic behaviors through an economic lens“…

    In real English it translates into, “I have no job skills and the last job I had at a fast food palace they fired me – So now I baffle them with BS and someone is dumb enough to pay me for my BS“…

  6. mesaeconoguy

    Does economic freedom have a future in America?

    No.

    It’s over.

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