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A Brief Note On Oil Industry Profits Don Boudreaux The airwaves, newspapers, and cyberspace are crowded these days with cheap and disgusting accusations that current oil-company profits are "out of control," "obscene," and "windfall." I've not blogged on this issue yet because, frankly, I've nothing new or interesting to say.  The case for price controls, for government-mandated non-price rationing, and for a tax on so-called "windfall profits" is so lame, so utterly gossamer, that pointing out its flaws seems to be an exercise in stating the obvious. So I offer you only this thought suggested to me by my friend Brian Summers: Too bad homeowners don't post their property taxes, and the prices of their homes, the same way that gasoline retailers post their prices.  Posted in Prices | Permalink | Comments (7) | TrackBack (0) April 24, 2006 Krugman's Deficient Analysis Don Boudreaux In his column in today's New York Times, Paul Krugman worries about the trade deficit.  As regular Cafe visitors know, I do not worry about the trade deficit -- and I seldom lose an opportunity to explain why I believe that concern over the trade deficit is misplaced.  (Coyote blog is also wisely unconcerned about the trade deficit.) There's nothing new or compelling in Krugman's worry.  He wrongly claims, for example, that a trade deficit means that Americans must "sell stocks, bonds and businesses to foreigners."  But this claim is untrue.  The U.S. trade deficit rises even when foreigners make new investments in the U.S. -- when foreigners create in the U.S. productive assets that never before existed. And Krugman's answer to a question that he correctly anticipates his critics asking is facile.  The question is, in Krugman's words, "if things are really that bad, why are so many foreign investors still buying U.S. bonds?"  Krugman's answer is: "I have two words for those who place their faith in the judgment of investors, and believe that a few good years are enough to prove the skeptics wrong: Nasdaq 5,000." First, the collapse of the Nasdaq is hardly a sufficient basis on which to generalize about investors' judgments.  Yes, bubbles exist -- but this fact hardly means that all steady investment is the result of a bubble. Second, the U.S. has run a current-account deficit every year for nearly thirty years.  Indeed, more generally, America ran a current-account deficit for pretty much the entire period ranging from the English settlement at Jamestown in 1607 until World War I.  (See William A. Niskanen, "The Determinants of US. Capital Imports," Annals of the American Academy of Political and Social Science, July 1991, pp. 36-49.) Those 300+ years -- and the past thirty years -- are much more that a mere "few good years" that can be dismissed as flukey. Posted in Myths and Fallacies, Trade | Permalink | Comments (18) | TrackBack (0) April 22, 2006 Truly, Money is NOT All that Matters Don Boudreaux "Oh, you economists!  You think that the only thing people care about is money.  How ridiculous!" -- such runs a typical accusation by people who know nothing about economics. Economists, as a matter of fact, are especially aware that people care about much more than money.  That's why, for example, economists understand that even low-skilled workers who find or retain jobs in the wake of a hike in the legislated minimum wage might nevertheless be worse off than if the minimum-wage had not been raised. My latest column in the Pittsburgh Tribune-Review explains. Posted in Myths and Fallacies | Permalink | Comments (31) | TrackBack (1) April 18, 2006 Stadiums, Broken Windows and more Russell Roberts In this Econtalk podcast with Skip Sauer of Clemson University, we talk about stadiums, the economics of sports leagues and the economics of college sports. Again, comments much appreciated. This earlier post is based on our discussion. You can subscribe to EconTalk by going to iTunes, searching for "EconTalk" and subscribing there. Feel free to use the comments section of this post for any reaction to the ideas in the podcast. Posted in Podcast, Sports | Permalink | Comments (3) | TrackBack (0) April 17, 2006 Why Modern Mercantilists Such as Paul Craig Roberts and Lou Dobbs are Mistaken Don Boudreaux Paul Craig Roberts believes that Americans' standard of living is threatened by the world's growing prosperity, improved education, better governance, and greater fluidity of capital and resources to move in search of higher returns. This alleged cause of U.S. economic decline is so bizarre that you're forgiven if you question my interpretation of P.C. Roberts.  But in my latest article at Tech Central Station I quote from the 2004 New York Times op-ed that P.C. Roberts co-wrote with Senator Charles Schumer.  You judge. Oh -- in this TCS essay I also explain (more concisely than I do here) why P.C. Roberts and his intellectual cohorts such as Lou Dobbs and Sen. Schumer are wrong about free trade.  P.C. Roberts, Dobbs, et al., seem to be on a mission to resurrect mercantilism's beggar-thy-neighbor fallacy. Posted in Trade | Permalink | Comments (53) | TrackBack (1) April 15, 2006 The Reddest of Red Herrings Don Boudreaux Suppose that several proponents of lower taxes argued that one important reason -- maybe the important reason -- for cutting taxes is that lower taxes save paper.  "If we cut taxes, we'll use up less paper in record keeping and tax filing.  What a boon such a saving would be to our economy!" Persons opposed to cutting taxes would surely respond that this effect is so small as to be irrelevant.  Indeed, this effect might not even be real.  But the tax-cut advocates don't give up: they keep focusing on the paper-saving that they argue will result from tax cuts. Surely, if this paper-saving argument is the best one for cutting taxes, the case for cutting taxes would be very weak indeed. ..... The above ridiculous scenario isn't very far from the scenario playing out now in the immigration debate.  Many people on the pro-immigration side say that immigrants do jobs that Americans won't do.  Those opposed to freer immigration then correctly respond that if the supply of workers to do these jobs falls (say, because immigration is restricted further), the wages paid to perform these jobs will rise and, thus, attract Americans into these jobs.  In fact, even if we totally prohibit any further immigration into America, Americans' lawns will still be mowed, our garbage will still be collected, our homes will still be cleaned, and produce grown on American farms will still be harvested. This claim that "immigrants do jobs that Americans won't do" permits opponents of immigration to win easy battles by exposing the foolishness of such arguments.  And because so many people today seem to think that the main economic advantage of immigration is that it supplies people willing to do jobs that Americans won't do, immigration opponents gain much more credibility than they deserve. The "jobs Americans won't do" issue is a neon-brilliant-scarlet red herring. Posted in Immigration | Permalink | Comments (51) | TrackBack (0) Fogel on Life-Expectancy Don Boudreaux I can't wait to read Robert Fogel's new book, The Escape from Hunger and Premature Death, 1700-2100: Europe, America, and the Third World. The hot-off-the-press issue of the Journal of Economic Literature has a nice review of this book by Angus Deaton.  According to Deaton, Fogel extends Thomas McKeown's thesis that the increase in life-expectancy during the past 200 years is much more the result of economic growth and improved nutrition than the result of improvements in medicine and public health.  Deaton questions -- compellingly, in my view -- Fogel's (and McKeown's) downplaying of the importance of public-health measures such as improved sewerage.  But overall Deaton finds Fogel's data and use of these data wonderfully rewarding. Here's one of my favorite insights from Fogel, as expressed by Deaton: Inventing a Wellsian time machine to take us all back to eighteenth-century England would be as good for our health as transporting us to the moon without spacesuits.  Our bodies are simply too large to survive on the average food supplies then available. Posted in Standard of Living | Permalink | Comments (17) | TrackBack (1) April 14, 2006 Another Note on Global Warming Don Boudreaux MIT Professor of Atmospheric Science Richard Lindzen has this to say about global warming. I found the most intriguing paragraph to be this one: If the models are correct, global warming reduces the temperature differences between the poles and the equator. When you have less difference in temperature, you have less excitation of extratropical storms, not more. And, in fact, model runs support this conclusion. Alarmists have drawn some support for increased claims of tropical storminess from a casual claim by Sir John Houghton of the U.N.'s Intergovernmental Panel on Climate Change (IPCC) that a warmer world would have more evaporation, with latent heat providing more energy for disturbances. The problem with this is that the ability of evaporation to drive tropical storms relies not only on temperature but humidity as well, and calls for drier, less humid air. Claims for starkly higher temperatures are based upon there being more humidity, not less--hardly a case for more storminess with global warming. (Hat tip to Vernon Smith.) I'm not an atmospheric scientist, a climatologist, a meteorologist, or any other kind of hard scientist you care to name.  (By the way, I'll bet that the vast majority of people who opine on global warming are just like me.)  But I do know a thing or two about economics and the economics of politics.  Regardless of the scientific merits of claims of global warming and claims of humankinds' role (or not) in promoting global warming, it is unscientific in the extreme to assume that government can or will handle whatever problem there is wisely.  Simply to assume that, if problem X exists, giving power to government to solve problem X will actually solve problem X, or will do so without creating even worse problems Y and Z, is to ignore history and our scientific knowledge of politics. Posted in Environment, Politics | Permalink | Comments (19) | TrackBack (0) April 13, 2006 Kinder, Gentler America Don Boudreaux Since moving to The Atlantic, Clive Crook has written some outstanding articles.  One is this wonderful essay (summarized by Alex at Marginal Revolution) on why something as lovable as capitalism is largely unloved. Another of Crook's outstanding essays appears in the current -- the May 2006 -- Atlantic.  It's on immigration.  It's theme is that the allegedly humane European system of "social democracy" creates cruelty and callousness toward immigrants -- much more cruelty and callousness than exists here in America.  Here's Crook: On the face of it, America's welfare system is harsher and less hospitable than Europe's, something that many liberals lament.  But in this respect, at least, that appearance is misleading.  The unintended consequences of Europe's milder regime are not just a looming fiscal collapse but also, in the meantime, intensifying and plainly self-destructive anti-immigration sentiment.  America's harsher insistence on work is not just economically advantageous (which is self-evident) but socially beneficial as well (which some may find surprising).  Jobs alone are not enough to ensure successful assimilation of immigrants, but jobs are a necessary condition.  By insisting that immigrants work, the host country attacks the incumbents' intellectual and emotional resistance to immigration.  The work requirement increases the dispersed economic benefits; it reduces or eliminates the net fiscal burdens; and it lowers cultural barriers.  As a result, tempers cool.  In these key respects, America's more brutal model is kinder -- in addition to bring more sustainable. Everything is relative, of course.  Uncle Sam is not as ready as Crook suggests to let foreigners work in America.  But Uncle Sam is much more tolerant -- and, hence, less brutal -- on this front than are European welfare-state governments. Posted in Immigration | Permalink | Comments (5) | TrackBack (0) Complete archives at http://www.sitbot.net/ Please let us stay on topic and be civil. OM SPONSORED LINKS United state bankruptcy court western district of texas United state life insurance United state patent United state patent search United states patent office United state flag YAHOO! GROUPS LINKS  Visit your group "cia-drugs" on the web.    To unsubscribe from this group, send an email to:  [EMAIL PROTECTED]    Your use of Yahoo! Groups is subject to the Yahoo! Terms of Service.