Stephen Miran on crowding out; Jerry Muller on Conservatism; Wealth in America; David Brooks on politics and personal needs; Noah Smith on extraction economies
“...lonely and socially ill societies have the politics of recognition. Everybody's hungry to be affirmed.”
I’m reading Dale Carnegie’s “How to Win Friends and Influence People”, which is always a fun read (even though I don’t have any more friends or influence than I did before). But he says one of the most important things to get out of the book is an understanding that what people want most of all is to feel important. Everyone has a *different* thing that makes them feel important in particular, of course, and figuring that out is the trick.
Brooks states this as a kind of malaise and error, but I think Carnegie’s right that it’s the fundamental state of humanity. Query what makes Brooks feel important. (I do hate to be so snarky because I met him once and he was quite nice. But I find him pedantic and condescending and generally hard to take.)
What *I* think of Krugman? I really can't read anything by him, to be honest. There's so much interesting stuff out there that I just don't spend time. I accept that he's a smart guy and that people I respect, respect him. But, yeah, my impression is that he's promoting a side rather than grappling with ideas. He wouldn't do well on my "fantasy intellectual team" for sure.
Yep. I've had the exact same problem with his columns. He's also a little too sure of himself. That said, somehow I got on his email list. I've seen one of those as a column but what I get that way is very different from his columns of the past. It's very much focused on economics, not politics and he has talked a fair bit about being wrong in the past and not certain about the future. Either he's maturing in his elder years, or this writing is a totally different side of him. In at least one I learned a lot of mid-level economics he clearly new and understood way better than me. I've been pleasantly surprised.
Regarding "resource curse," while I would agree that many resource-rich countries develop corrupt systems, the first symptom of the curse is the domestic currency rise in value as foreign customers seek the currency to buy the resource. This negatively affects the export industry. It has been referred to as the "Dutch disease" because Dutch natural gas finds hurt Dutch exports. Moreover, not all resource-rich countries end up corrupt, for example, US, Canada & Australia.
The curse, dear Economist, is not in our resources, but in ourselves.
Norway is the poster child for "What resource curse?" Their sovereign wealth funds are something like $250k per person.
To the extent Norway has been feeling more cursed than normal lately, it's mostly due to newcomers, some from "resource curse" countries.
Many economists like to point out that people are the ultimate resource, at least, the entrepreneurial or smart fraction or innovation-generating parts.
But the thing about human capital is that unlike petroleum capital - which is always positive in value - humans can drop to marginal zero productivity, and, alas, far below that too. If you look for the curse, beware, it looks back at you.
Beginning any effort to understand politics by saying something like:
"liberals typically view with suspicion the restraints and penalties imposed upon the individual by institutions, conservatives are disposed to protect the authority and legitimacy of existing institutions because they believe human society cannot flourish without them."
seems like something out of a children's book. No recognition of what "institutions" we're talking about. Everyone is a conservative when it comes to institutions they control. The left increasingly controls institutions, so they've became shockingly conformist and authoritarian. The right doesn't, and so they've become more more suspcious of institutions. Though I wouldn't, strictly speaking, call that "liberalism" myself.
During WWI and WWII Germans got lots of bonds and other assets that told them they had a lot of paper wealth. They just weren't able to actually spend it on anything.
I feel the same way about my house. Zillow says its worth a lot of money, but if I sell it to move to Florida I've got to buy another overpriced house with a way higher mortgage rate.
You are far far wealthier as a home owner than all the non-homeowners -- who also have to live somewhere. If you could sell and buy in Florida, there's likely "less desirable" places where, due to location, can be the same size & comfort but cheaper.
Part of the young folks' rejection of capitalism, and many blacks, is that you as a parent could buy a house as a worker some decades ago, but many of them today don't think they can. NIMBYs and regulations and zoning - and few new good jobs where houses cost less.
What I mean is that since I need a place to live my house going up in price, if every other house goes up in price, doesn't actually make me "wealthier". In fact it may make me poorer (taxes go up). Furthermore, if I move my mortgage goes from 1.875% to 8% overnight on the same debt.
Juxtaposing the Muller and Brooks excerpts - isn't radical conservatism (as well as radical progressivism) a non-profit with a cause? And aren't they both essentially status-based, seeking a moral frame for defeating the "other side"?
Muller's excerpted description (which i don't know if he endorses) of radical conservatism sounds like radicalism with a veneer of conservative rationalization.
'Both the WSJ and Noah Smith took note of the latest survey of consumer finances in America.'
Did this survey, perhaps, just maybe... forget to net out government bonds as wealth? It wouldn't be right if we had, say $50,000 in government bonds as an asset for our household and to ignore the expected tax burden to pay those off and just mark it as 'wealth', would it?
It does need to be excluded to some extent, though. At the individual level, if I own $1,000,000 of US government debt and nothing else and are not in hock personally, the stats Smith and the WSJ are talking about will say I have a net wealth of $1,000,000. However, I am on the hook for the federal, state, and local government debt either through future taxes or future depreciation of the currency. What is needed is a more granular level of analysis that takes this sort of thing into account.
That's not really true for most people, maybe nobody.
- Some portion of that federal debt is "sustainable." More importantly, it is extremely unlikely it will ever be paid off. In fact it is unlikely ANY of the current federal debt will ever be paid off. Hopefully the deficits will go down, the debt will increase more slowly, and become smaller relatively to GDP but I don't expect it to be smaller than today in my lifetime.
- As we go from the 99th percentile taxable income to 95th to 80th, the share of the federal tax burden goes down rapidly. Most people are "on the hook" for little or none of that debt and this is unlikely to change significantly.
Inflation only "taxes" cash. Values for most assets increase with inflation. Bond rates and most other interest bearing accounts have rates in part based on expected inflation.
Increasing inflation is also a tax but decreasing inflation is a tax refund.
If what you wrote above had any reality behind it whatsoever, the government could borrow 20 trillion dollars and give every single American in the bottom 95% of the wealth distribution $50,000 dollars in wealth.
Read again. "Some portion of that federal debt is "sustainable." " I'm not going to suggest all of our current federal debt is sustainable. Maybe it is, maybe it isn't. Either way, little or none of an additional $20T is likely to be sustainable.
Let me answer a second way. At this moment, the debt is sustainable. There is a definite risk that next month, next year everything will come crashing down and it is no longer sustainable. That risk may be 1% or 99% but until it happens, the debt is sustainable.
I don't care whether or not it is sustainable- my point is that it is always paid off in one form or another by the citizens of the country, and no one escapes this payment because a great deal of the paying it off comes in the form of inflation.
Stu, it is always paid off, one way or another. The interest is paid every single term period, and the principle is paid off over time in inflation if not explicitly retired. There are no free lunches.
No, it's not always paid off and there ARE free lunches. The obvious one is that a certain amount of the printed money is necessary and always will be necessary for economic transactions. This is money the government printed and will never have to redeem. Even better, people in other countries use dollars as a store of value. All Americans benefit from that. And any losses they suffer due to inflation also benefits all Americans.
We disagree on the impact of inflation. I can't say whether 2% inflation is optimal but I strongly believe it is better than zero and anywhere between 1% and 5% or even maybe 10% isn't all the much worse than optimal.
As I hinted in a previous comment, changes in inflation causes many problems. Hopefully we can agree on this much.
I faithfully gave my little bit to Wikipedia, not unpleased that they asked for so little - because does more than a couple days go by that I don’t look at Wikipedia?
But then I figured it was like donating to George Soros. Fine or neutral for many, decidedly not cool with me. And unmentioned in the plea.
“Net worth” does not include the dollar value of American citizenship or permanent residence. Arguably that has been impaired by the rise in public debt. (It also does not include human capital; I wonder how that has changed.)
“And if some of the runup in stock prices and house prices turns out to be unsustainable?” Stock prices and house prices may go up; why so negative?
Muller’s introduction recognizes that the ever-changing and multi-faceted word called “conservatism” does not represent any one thing, and is not easily defined as one thing, but for some reason he still tries to talk about conservatism past and present as if it were one thing, compressing the multi-dimensional philosophical and political space into a single axis, and the result provides very little value in my opinion. For some reason, of all the different groups that have been called conservatives, the only one that gets any distinction in his introduction is “radical conservatives,” of which the only individuals mentioned are 19th to early 20th century century proto-Nazis. I’m not sure where he is going here, but it smells fishy.
I think I’m being unfair in my second point. Muller also wrote a book called “The Other God That Failed: Hans Freyer and the Deradicalization of German Conservatism.” Maybe he just has an academic interest in historical proto-Nazi “radical conservatism” and is letting that color his description of conservatism. Still kind of odd.
“...lonely and socially ill societies have the politics of recognition. Everybody's hungry to be affirmed.”
I’m reading Dale Carnegie’s “How to Win Friends and Influence People”, which is always a fun read (even though I don’t have any more friends or influence than I did before). But he says one of the most important things to get out of the book is an understanding that what people want most of all is to feel important. Everyone has a *different* thing that makes them feel important in particular, of course, and figuring that out is the trick.
Brooks states this as a kind of malaise and error, but I think Carnegie’s right that it’s the fundamental state of humanity. Query what makes Brooks feel important. (I do hate to be so snarky because I met him once and he was quite nice. But I find him pedantic and condescending and generally hard to take.)
Agree and not favorably disposed towards Thomas Friedman or Krugman, too.
Paul K was a brilliant trade economist, but has gotten too political and left wing for my tastes.
I'm curious what you think of Krugman.
What *I* think of Krugman? I really can't read anything by him, to be honest. There's so much interesting stuff out there that I just don't spend time. I accept that he's a smart guy and that people I respect, respect him. But, yeah, my impression is that he's promoting a side rather than grappling with ideas. He wouldn't do well on my "fantasy intellectual team" for sure.
Yep. I've had the exact same problem with his columns. He's also a little too sure of himself. That said, somehow I got on his email list. I've seen one of those as a column but what I get that way is very different from his columns of the past. It's very much focused on economics, not politics and he has talked a fair bit about being wrong in the past and not certain about the future. Either he's maturing in his elder years, or this writing is a totally different side of him. In at least one I learned a lot of mid-level economics he clearly new and understood way better than me. I've been pleasantly surprised.
Regarding "resource curse," while I would agree that many resource-rich countries develop corrupt systems, the first symptom of the curse is the domestic currency rise in value as foreign customers seek the currency to buy the resource. This negatively affects the export industry. It has been referred to as the "Dutch disease" because Dutch natural gas finds hurt Dutch exports. Moreover, not all resource-rich countries end up corrupt, for example, US, Canada & Australia.
The curse, dear Economist, is not in our resources, but in ourselves.
Norway is the poster child for "What resource curse?" Their sovereign wealth funds are something like $250k per person.
To the extent Norway has been feeling more cursed than normal lately, it's mostly due to newcomers, some from "resource curse" countries.
Many economists like to point out that people are the ultimate resource, at least, the entrepreneurial or smart fraction or innovation-generating parts.
But the thing about human capital is that unlike petroleum capital - which is always positive in value - humans can drop to marginal zero productivity, and, alas, far below that too. If you look for the curse, beware, it looks back at you.
Beginning any effort to understand politics by saying something like:
"liberals typically view with suspicion the restraints and penalties imposed upon the individual by institutions, conservatives are disposed to protect the authority and legitimacy of existing institutions because they believe human society cannot flourish without them."
seems like something out of a children's book. No recognition of what "institutions" we're talking about. Everyone is a conservative when it comes to institutions they control. The left increasingly controls institutions, so they've became shockingly conformist and authoritarian. The right doesn't, and so they've become more more suspcious of institutions. Though I wouldn't, strictly speaking, call that "liberalism" myself.
During WWI and WWII Germans got lots of bonds and other assets that told them they had a lot of paper wealth. They just weren't able to actually spend it on anything.
I feel the same way about my house. Zillow says its worth a lot of money, but if I sell it to move to Florida I've got to buy another overpriced house with a way higher mortgage rate.
You are far far wealthier as a home owner than all the non-homeowners -- who also have to live somewhere. If you could sell and buy in Florida, there's likely "less desirable" places where, due to location, can be the same size & comfort but cheaper.
Part of the young folks' rejection of capitalism, and many blacks, is that you as a parent could buy a house as a worker some decades ago, but many of them today don't think they can. NIMBYs and regulations and zoning - and few new good jobs where houses cost less.
Why do you think it is overpriced?
If someone is willing to buy it, doesn't that mean it isn't overpriced?
What I mean is that since I need a place to live my house going up in price, if every other house goes up in price, doesn't actually make me "wealthier". In fact it may make me poorer (taxes go up). Furthermore, if I move my mortgage goes from 1.875% to 8% overnight on the same debt.
Yep. Those are real problems. They don't sound like "overpriced" though.
Ignore this- I made a big mistake in my comment and deleted it.
I didn’t see the original comment. I just wanted to commend the notion of affirmatively saying when you messed up, even if it’s inconsequential.
Non-profits whose primary activity (after fund-raising, obviously) is “raising awareness” are among the worst organizations around.
Juxtaposing the Muller and Brooks excerpts - isn't radical conservatism (as well as radical progressivism) a non-profit with a cause? And aren't they both essentially status-based, seeking a moral frame for defeating the "other side"?
Muller's excerpted description (which i don't know if he endorses) of radical conservatism sounds like radicalism with a veneer of conservative rationalization.
'Both the WSJ and Noah Smith took note of the latest survey of consumer finances in America.'
Did this survey, perhaps, just maybe... forget to net out government bonds as wealth? It wouldn't be right if we had, say $50,000 in government bonds as an asset for our household and to ignore the expected tax burden to pay those off and just mark it as 'wealth', would it?
That argument reminds me of Piketty. He and cohorts came up with some surprising conclusions by their deciding what to include and exclude.
It does need to be excluded to some extent, though. At the individual level, if I own $1,000,000 of US government debt and nothing else and are not in hock personally, the stats Smith and the WSJ are talking about will say I have a net wealth of $1,000,000. However, I am on the hook for the federal, state, and local government debt either through future taxes or future depreciation of the currency. What is needed is a more granular level of analysis that takes this sort of thing into account.
That's not really true for most people, maybe nobody.
- Some portion of that federal debt is "sustainable." More importantly, it is extremely unlikely it will ever be paid off. In fact it is unlikely ANY of the current federal debt will ever be paid off. Hopefully the deficits will go down, the debt will increase more slowly, and become smaller relatively to GDP but I don't expect it to be smaller than today in my lifetime.
- As we go from the 99th percentile taxable income to 95th to 80th, the share of the federal tax burden goes down rapidly. Most people are "on the hook" for little or none of that debt and this is unlikely to change significantly.
And no one escapes the inflation tax, no matter what their income is.
Inflation only "taxes" cash. Values for most assets increase with inflation. Bond rates and most other interest bearing accounts have rates in part based on expected inflation.
Increasing inflation is also a tax but decreasing inflation is a tax refund.
Inflation taxes everyone, Stu, and all forms of income. That you don't understand this is astounding to me.
If what you wrote above had any reality behind it whatsoever, the government could borrow 20 trillion dollars and give every single American in the bottom 95% of the wealth distribution $50,000 dollars in wealth.
Read again. "Some portion of that federal debt is "sustainable." " I'm not going to suggest all of our current federal debt is sustainable. Maybe it is, maybe it isn't. Either way, little or none of an additional $20T is likely to be sustainable.
Let me answer a second way. At this moment, the debt is sustainable. There is a definite risk that next month, next year everything will come crashing down and it is no longer sustainable. That risk may be 1% or 99% but until it happens, the debt is sustainable.
I don't care whether or not it is sustainable- my point is that it is always paid off in one form or another by the citizens of the country, and no one escapes this payment because a great deal of the paying it off comes in the form of inflation.
Stu, it is always paid off, one way or another. The interest is paid every single term period, and the principle is paid off over time in inflation if not explicitly retired. There are no free lunches.
No, it's not always paid off and there ARE free lunches. The obvious one is that a certain amount of the printed money is necessary and always will be necessary for economic transactions. This is money the government printed and will never have to redeem. Even better, people in other countries use dollars as a store of value. All Americans benefit from that. And any losses they suffer due to inflation also benefits all Americans.
We disagree on the impact of inflation. I can't say whether 2% inflation is optimal but I strongly believe it is better than zero and anywhere between 1% and 5% or even maybe 10% isn't all the much worse than optimal.
As I hinted in a previous comment, changes in inflation causes many problems. Hopefully we can agree on this much.
No, Stu- there are no free lunches. Only foolish people believe what you do here in this comment.
I faithfully gave my little bit to Wikipedia, not unpleased that they asked for so little - because does more than a couple days go by that I don’t look at Wikipedia?
But then I figured it was like donating to George Soros. Fine or neutral for many, decidedly not cool with me. And unmentioned in the plea.
“Net worth” does not include the dollar value of American citizenship or permanent residence. Arguably that has been impaired by the rise in public debt. (It also does not include human capital; I wonder how that has changed.)
“And if some of the runup in stock prices and house prices turns out to be unsustainable?” Stock prices and house prices may go up; why so negative?
Muller’s introduction recognizes that the ever-changing and multi-faceted word called “conservatism” does not represent any one thing, and is not easily defined as one thing, but for some reason he still tries to talk about conservatism past and present as if it were one thing, compressing the multi-dimensional philosophical and political space into a single axis, and the result provides very little value in my opinion. For some reason, of all the different groups that have been called conservatives, the only one that gets any distinction in his introduction is “radical conservatives,” of which the only individuals mentioned are 19th to early 20th century century proto-Nazis. I’m not sure where he is going here, but it smells fishy.
I think I’m being unfair in my second point. Muller also wrote a book called “The Other God That Failed: Hans Freyer and the Deradicalization of German Conservatism.” Maybe he just has an academic interest in historical proto-Nazi “radical conservatism” and is letting that color his description of conservatism. Still kind of odd.
If you go to archive.is often you can read them. https://archive.ph/wbVSP