Thursday, May 21, 2009

Fun with graphics and the environment!

Well, the Environmental Defense Fund has a cute graphic out (HT: Free Advice) promoting "green jobs":

The basic idea, as you probably figured out from the graphic, is that mandating pollution caps will give people something to do, thus reducing unemployment. They don't put it that way, of course, but that's the idea, and it's a rehash of the Broken Windows Fallacy.

This justification for pollution restrictions misses the point, of course. Assigning well-defined, sustainable pollution rights is a good idea, for the same reason that assigning rights to any scarce resource is a good idea: because of justice and efficiency, not because it would add another task for people to do.

In light of all of that, I decided to pull a SomethingAwful and put different words into the graphic, in an attempt to criticize my nemesis Bob Murphy's (of the Free Advice site linked above) sudden love of Coasean extortion payments when it comes to pollution. Enjoy!

Tuesday, May 12, 2009


Now, find what question from a previous post that's an answer to.

Spot the common professional economists' error

From James Hamilton:

When academic economists talk about inflation, we often think in terms of a single-good economy in which the concept refers unambiguously to an increase in the dollar price of that good.

If you can't wait for me to give you the answer, just go to the link and find my link. Well, I don't give it there either.

Anyway, all I can say is, if you make this kind of error at the beginning, don't expect me to put a lot of faith in your analysis...

Wednesday, May 6, 2009

Government loan to Chrysler now a gift

So it turns out that all that money the government "loaned" to bankrupt Chrysler doesn't have to be paid back, making it a gift, a handout, a chunk of free money. (Incidentally, this is one of my complaints about the whole vocabulary of discussing the crisis. Companies whine about how they need "liquidity" or "credit" or "short-term working capital". No. They need free money. More on that some other time.)

It just gets worse with every passing day. First, it was, "Don't worry guys, we're just giving loans to troubled companies, they'll pay them back, it's not like we're favoring anyone here!"

And now they throw all that to the wind, making it a $7 billion gift to failing Chrysler to cover up its complete inability to meet its obligations, and draw in people who had nothing to do with the management of Chrysler. (A friend and I dubbed it the "bridge loan to nowhere".)

Gee, when do *I* get my $7 billion loan that I don't have to pay back. I'll make sure to pay taxes on it! (Anyone think Chrysler's going to do the same for their "lobbying income"?)

A version of this is cross-posted as a comment at Naked Capitalsim.