Starting today and throughout this week, the Cato Daily Podcast (Subscribe!) will drill down into issues related to immigration. First up, Alex Nowrasteh and I discuss the persistent myths surrounding immigrants and crime. Put simply, if you’re going to worry about crime rates among groups, worry relatively more about your fellow Americans and relatively less about immigrants, both legal and illegal.
Here’s a remarkably clear description of the entrepreneur’s role from Frank Zappa. In short, the risks are big, the rewards are uncertain and the personnel should be focused on the mission or they should leave.
In the late 1980s, I recall Zappa appearing on “Crossfire” to discuss the problems associated with attempts to limit or punish artists who use off-color language or produce work that deals with off-color themes. At one point in the discussion, he defiantly calls himself a “conservative.” Given this description of what an entrepreneur actually does, I now more fully understand what he meant.
This should be required listening for anyone (*cough* Republicans *cough*) who claim to admire those who take big financial risks in pursuit of big rewards.
First, I love The Oatmeal. Matt Inman’s comic regularly speaks my mind on all manner of life’s little complaints (and solutions). Sadly, when he tried to explain net neutrality, I think he missed the mark. By a lot.
Then the President decided he’d offer some free advice to the FCC on how that agency should proceed with regulating the internet. Same problem.
So I sat down with Berin Szoka of Techfreedom to try to separate the aspirations of activists from the realities of how markets and the internet actually function and what kind of regulatory regime will serve consumers best.
It was great to sit down with Russ Roberts, Econtalk host and former professor of mine, to discuss his great new book, How Adam Smith Can Change Your Life: An Unexpected Guide to Human Nature and Happiness. Russ is, in class, one of the most concise communicators of economic ideas I’ve ever seen. He’s also able to abandon much of the jargon that makes economic ideas so often uninteresting to the average person.
“Burning Man, like any city or nation, requires funding and organization to function. When people buy tickets, they help to pay for the event’s needs as a price of citizenship. It’s exactly the same as a tax.”
– Tom Berman, “Here’s Why Republicans Should Not Be Getting Into Burning Man”
You see, it’s just like when I pay my annual CostCo tax or the occasional Concert Tax or Batting Cage Tax. It’s exactly the same thing. Except I don’t have to pay any of those taxes. Now, actual taxes? Yeah, you pay those or go to jail.
Seven years ago, Thomas Sargent (Nobel, 2011) gave perhaps one of the shortest (and therefore best) commencement addresses ever:
I remember how happy I felt when I graduated from Berkeley many years ago. But I thought the graduation speeches were long. I will economize on words.
Economics is organized common sense. Here is a short list of valuable lessons that our beautiful subject teaches.
1. Many things that are desirable are not feasible.
2. Individuals and communities face trade-offs.
3. Other people have more information about their abilities, their efforts, and their preferences than you do.
4. Everyone responds to incentives, including people you want to help. That is why social safety nets don’t always end up working as intended.
5. There are tradeoffs between equality and efficiency.
6. In an equilibrium of a game or an economy, people are satisfied with their choices. That is why it is difficult for well-meaning outsiders to change things for better or worse.
7. In the future, you too will respond to incentives. That is why there are some promises that you’d like to make but can’t. No one will believe those promises because they know that later it will not be in your interest to deliver. The lesson here is this: before you make a promise, think about whether you will want to keep it if and when your circumstances change. This is how you earn a reputation.
8. Governments and voters respond to incentives too. That is why governments sometimes default on loans and other promises that they have made.
9. It is feasible for one generation to shift costs to subsequent ones. That is what national government debts and the U.S. social security system do (but not the social security system of Singapore).
10. When a government spends, its citizens eventually pay, either today or tomorrow, either through explicit taxes or implicit ones like inflation.
11. Most people want other people to pay for public goods and government transfers (especially transfers to themselves).
12. Because market prices aggregate traders’ information, it is difficult to forecast stock prices and interest rates and exchange rates.
Recent violence in Louisville has thankfully started many public conversations about poverty, education and culture that otherwise be relegated to quiet, resigned laments at the dinner table. That Louisvillians are talking about this publicly is broadly to the good. Unfortunately, one well-worn claim about How We Got Here doesn’t stand up to basic scrutiny.
We used to pay for real educators and leaders spending the time to teach youth who are currently neglected and forgotten. We used to have career and vocational programs for kids who aren’t necessarily college material – I know plenty of successful adults today who learned a trade in high school, anything from auto mechanics to printing to agriculture. Today, if you’re not college-bound, an athlete, or an entertainer, you are entirely on your own to find a trade or a career – no wonder ‘pro athlete’ and ‘gangsta rapper’ are the only goals of so many children. Kids don’t learn that there is success in working for a living – in our culture, in our education systems, in the media, either you are fabulously wealthy or you are nothing.
I include the latter part about vocational education because I agree with it almost entirely. The median salary for plumbers in America is about $49,000.
On the broader issue of what “we used to pay for”, I responded:
— Caleb O. Brown (@cobrown) March 30, 2014
@cobrown You cannot be serious. My county is so short of funds they haven't had textbooks since 2003. Schools are flat broke.
— Tim Druck (@southendtimd) March 30, 2014
And I responded with this:
— Caleb O. Brown (@cobrown) March 30, 2014
Here’s the relevant chart:
It’s a powerful testament to the power of public school salesmanship and media handwringing that the most carefully considered, thoughtful answer to basically any problem with public schools must always be, say it with me, More Funding.
It’s past time Kentuckians admitted that More Funding has been tried for decades. The persistent problems of low proficiency in reading and math in Jefferson county (despite decades of More Funding) should be laid squarely at the feet of the public school establishment and its defenders.
Kentucky is among a shrinking number of states with no charter schools and no private school choice. This, too, is a testament to the power of the public school establishment that has fought to keep students in failing schools.
But let’s be clear: School choice is not the silver bullet cure to my hometown’s violence. It is, however, a powerful way to engage parents in making one of the most important decisions on behalf of their children that they’ll ever make. If a robust transfer of power away from public schools and into the hands of low-income parents isn’t on the table, then I think it’s safe to call that intentional oversight yet another testament to the power of the public school establishment.
(Related: KidsCount.org has a darn good website.)
Update: Alas, it appears Mr. Druck would rather punish the wealthy than help the poor …
@cobrown nicely written but I disagree. Zero evidence that choice in schools improves school districts. I say ban private schools entirely.
— Tim Druck (@southendtimd) March 31, 2014
If the betterment of school district performance were the only relevant metric for school choice … Tim would still be mistaken.
Also, does anyone honestly care about school districts? Better to worry about how kids currently trapped in those districts get educated.
Last year Roger Ver gave the Foundation for Economic Education the largest-ever bitcoin donation to any nonprofit. At the time of the donation, it was worth more than a million dollars.
The problem is Mr. Ver stole the basic idea from me. I mean, pretty much.
When I emceed FEE’s first-ever Leonard E. Read Alumni Award dinner last night in Naples, Florida, I showed this video and proved my case conclusively.*
Here’s how car service Uber deals with demand for their services:
When a lot of people are looking for an Uber car — like during a recent New York snowstorm, or Washington on New Year’s Eve — it sets the rate higher, in the hope of increasing supply, by enticing more of its drivers to come out or stay out. (Regardless of intent, the prices jump quickly, and from a user’s point of view, work more as a form of demand-limiting price discrimination than supply-inducing incentive.)
During a recent New York snowstorm, some rides cost 8.25 times the standard price.
Here’s how French cabbies deal with demand for the same kind of service:
“Smashed windows, tires, vandalized vehicle, and bleeding hands,” passenger Kat Borlongan said on her Twitter feed, describing what happened after an Uber car picked her up at Charles de Gaulle Airport (aka Roissy Airport). “Attackers tried to get in the car, but our brave Uber driver maneuvered us to safety, changed the tire on the freeway, and got us home,” she said.
Two other cars, booked through the local Chauffeur Privé service, were targeted in similar attacks near Orly Airport and the Montparnasse train station. “Eggs and stones were thrown, and there were violent blows that broke the cars’ windows and rear-view mirrors,” Chauffeur Privé said in a statement.
Tensions between cabbies and Uber have been brewing for months. At the request of taxi drivers, the government recently imposed a new rule on private services requiring a minimum 15-minute wait between the time a car is booked and the passenger is picked up.
Which one of these is more peaceful? Which embraces openness, honesty and respect for our fellows?
I’ve long considered producing a short doc on the rise and disintegration of Ollie’s Trolley, a restaurant franchise operation that has a few lasting remnants, notably in Louisville and the D.C. area. If anyone has any information that might be useful to get such a project moving, I’d love to hear from you.