Krugman interview om Iraq

God Jul

Er Krugman gået amok?

De sidste dage har det mest relevante været Krugmans artikel i New York Times, hvor han ikke mener at demokraterne bør følge klassisk rubineconomics og skærer ned på underskudet som Bush har skabt.

Hans tankegang er som følger.

Alle (eller der er sikkert nogen som er uenig men økonomer er de ikke) er enige i at USA er nødt til at gøre et eller andet, Bush fik sit "trifecta" men det er uholdbart at USA til stadighed oversvømmer verden med kontanter for at betale for sit ekstravagante overforbrug.
Efter Reagan og bush I var det Clinton og nok specifikt Rubin, som fik styr på den amerikanske økonomi. Så kom bush II og nu er det noget lort igen.

Krugman mener så at det vil være absurt hvis demokraterne igen viser sig som de ansvarlige og dermed muligør en tredje omgang republikansk hidsig regresiv omfordeling. Derfor anbefaler Krugman at demokraterne ignorerer økonomisk sund fornuft, og acceptere at hvis republikanerne sætter politik over sund fornuft, så må demokraterne gøre det samme.

Best case er at republikanerne kommer til fornuft, og ikke gambler med verdensøkonomien. En mulig løsning er at man skaber et tit for tat spil. Det kræver at republikanerne bider i det sure æble og opfører sig ordenligt. Men det kræver også at demokraterne spiller højt spil og ikke spiller klassens pæne dreng.

God Jul fra mig

Delong fortsætter med at skrive hvad jeg ville ønske jeg kunne sige

Følgende er en hel post taget fra Delongs hjemmeside. Det ville have været høfligst hvis jeg bare havde taget et kort udsnit af teksten og så have linket til resten. Nu har jeg linket, men det han skriver er så godt jeg ikke kan finde ud af hvad der er bedst. Så i mangel af bedre:


What Should We Be Doing About Global Climate Change?

There are lots of fake disputes over global climate change. Does carbon dioxide in the atmosphere act like a giant blanket warming the earth? (Yes.) Does uncertainty about global warming mean that we should delay action? (No.) Should we be spending a much bigger fortune than we are on research: research into carbon-neutral power technologies, research into carbon-sequestration technologies, research into albedo-increasing technologies? (Yes.) Should India, China, and company have to bear a substantial part of the medium-term burden? (No: the rich countries got to take an easy carbon emissions-intensive path to industrialization and riches; theirs is the medium-term responsibility for dealing with the problem.) Should we be building or blocking the formation of the international institutions that will manage our reactions to global climate change over the next several centuries? (The first.)

There is, however, one real dispute: what else, besides research, should we be doing over the next decade or two? We economists like to think of things in terms of prices. And when we economists see something going wrong in the sense of having destructive side-effects, we like to tax it. Taxing it makes the individuals who are undertaking actions feel in their wallets the destruction they are causing elsewhere. Maybe the action is still worth doing, and maybe not. Imposing a tax--imposing the right tax--on those who are, say, driving low-mileage SUVs is a way of harnessing the collective intelligence of humanity to deciding in which case the bad side-effects are a reason to stop. But it needs to be the right tax.

An SUV going ten miles in the city and burning a gallon of gasoline pumps about 3 kilograms--6.5 pounds--of carbon in the form of carbon dioxide into the atmosphere. Should the extra tax on this--and on all carbon emissions--appropriate for global warming be on the order of five cents a gallon, fifty cents a gallon, or a dollar fifty a gallon? Our views will change as we learn more, but at the moment whether the tax should be five or fifty cents a gallon hinges on a question of moral philosophy: how much do we believe that we owe our distant descendents?

Australian economist John Quiggin has a very illuminating discussion on his website http://johnquiggin.com/wp-content/uploads/2006/12/sternreviewed06121.pdf. The Stern Review on Global Climate Change (on the internet at http://www.hm-treasury.gov.uk/independent_reviews/stern_review_economics_climate_change/sternreview_index.cfm) which comes down more on the side of fifty cents a gallon, immediately, does so because they project that spending today to reduce carbon emissions is a very good investment for the future. If the world grows in per capita income at about 2% per year, a marginal expenditure of roughly $70 today in cutting carbon emissions would be worth it if it were to enrich the world of 2100 by about an extra $500 of year-2006 purchasing power, once all the damages to the world economy and environment from global warming, costs of adjustment, and so on are taken into account. This looks like a very good deal to Nick Stern and his team.

On the other hand, critics point out that the world today is poor: average GDP per capita at purchasing power parity today is roughly $7000. We expect improvements in and the spread of technology to make the world of 2100, at a 2% per year growth rate much richer than the world of today: $50,000 per capita of year-2006 purchasing power. We today can use the marginal $70 per capita, critics say, much more than the richer people of 2100 will need the $500 or so they would gain from not having to suffer from the effects of global climate change.

What critics don't often say is that the same logic applies to the world today. The U.S., Japan, and Western Europe today have average incomes of roughly $40,000 per capita. The poorer half of the world's population today have incomes of less than $6,000 per capita. The same logic that says that we today need our $70 more than the people of 2100 need an extra $500 also tells us that we ought to tax the world's rich in the OECD more and more to fund world development as long as each extra $500 in first-world taxes generates even as little as $70 in extra poor-periphery incomes. If we in the world's rich now are stingy toward the (likely to be much richer) future and want to leave them our environmental mess to deal with, we should be lavish toward our poorer brothers and sisters today. If we today are stingy toward our poorer brothers and sisters now, we should be lavish toward our descendents.

At least, that is what we should do if we want to fulfill our part of Edmund Burke's great worldwide social contract between the dead, the living, and the unborn.

Kristol hos Jon part II

Del 1 af Kristol hos Jon

Kunne ikke have sagt det bedre selv

Følgende er Delongs afsluttende svada, efter en lang og rystende skrift om hvorledes en Videnskabsmand oplever mødet med politik og interesseorganisationerne, i dette tilfælde om hvordan de prøver at skjule og negligere global opvarmning. Hele teksten er god og relevant for de fleste mennesker der har bare det mindste behov for at blive informeret om manglen på realitetssands blandt dele af de politiske cirkler.

Men følgende tekst, er den bedste formulering af hvordan jeg opfatter økonomi, jeg har læst. Selvfølgelig er den fra Brad Delongs hånd:

"Keynesians... those awful people who brought us things like Social Security, Unemployment Compensation, and macroeconomic stabilization policy. And all those government regulations about polluting the air and rivers those commies put into place are such an inconvenience for business. It was so much better when they didn't have to care.

I am not anti-market. When there is market failure and markets are broken, they need to be fixed. I want markets to work efficiently and that requires some mechanism to force economic agents to internalize the costs they impose on the environment.

People who deny this basic point, or refuse to acknowledge the science that would justify such actions, should not promote themselves as advocates for well-functioning, efficient markets."

Via Andrew Sullivan

Det forklare hvordan mit snit er blevet så lavt

Jeg åbenbart ligge forkert i bunken inden den bliver kastet.

Når akademikere sviner

Her er et smukt citat, der viser hvordan mennesker med en lang lang uddannelse i økonomi sviner:
First Lucas told Klamer, "I don't think that Solow, in particular, has ever tried to come to grips with any of these issues except by making jokes."

A year later, Solow replied to Klamer, "Suppose someone sits down where you are sitting right now and announces to me that he is Napoleon Bonaparte. The last thing I want to do with him is to get involved in a technical discussion of cavalry tactics at the Battle of Austerlitz. If I do that, I'm getting tacitly drawn into the game that he is Napoleon Bonaparte."

Udover dette ret underholdende stykke tekst er resten af artiklen også værd at læse.

Kicking the Oil Habit

En udemærket artikel.

Måske bedste afsnit:

Moreover, the main oil exporters are unwilling to subordinate their investment policies to market requirements. Saudi Arabia seeks to run its oil production independently, while Iran scares off potential investors with bureaucratic hurdles and corruption. Iraq suffers from a lack of security, and foreign investors in Russia are thwarted at every turn. Those four states contain half of the world’s proven oil reserves and two-thirds of what could potentially be exported. All this, not production costs, lies at the heart of high oil prices and the scramble for oil contracts in Central Asia and Africa.

To believe that high oil prices are good because they serve the environment ignores some basic facts of international politics. First, in many of the poorest African and Asian countries, oil imports account for a significantly higher share of national expenditure than in industrialized countries, which means that economic growth and social development are being imperiled, while new debt crises loom.

Rents from oil production impede reforms in the major exporting countries. Thanks to their lubricated financial strength, regimes like those in Venezuela and Iran increasingly feel unconstrained by international rules. Latecomers among consuming nations, such as China, mimic the former habits of the industrialized West, with their long record of overlooking human rights abuses in order to secure lucrative deals with authoritarian, oil-rich regimes.

Hvis man har en nogle timer fri

Project Syndicate er i mine øjne et af de bedste steder at få lidt længere analyser end der står i de fleste aviser.

De har en feature der hedder thought leaders. Blandt dem jeg kender godt er:
Brad Delong, Joseph Stiglitz og Kenneth Rogoff.

Det gør at de navne jeg ikke kender allerede har min respekt.

Et tankevækkende citat af Ralf Dahrendorf: A multicultural society that accepts every taboo of its diverse groups would have little to talk about.

Stiglitz og inflation

Joseph Stiglitz skriver en artikel for guardian bl.a. følgende:

Phelps' work helped us to understand the complexity of the relationship between inflation and unemployment, and the important role that expectations can play in that relationship. But it is a misuse of that analysis to conclude that nothing can be done about unemployment, or that monetary authorities should focus exclusively on inflation.

That view belongs to a school of modern macroeconomics that assumes rational expectations and perfectly functioning markets. In other words, individuals - usually assumed to be identical - fully use all available information to forecast the future in an environment of perfect competition, no capital market shortcomings, and full insurance of all risks. Not only are these assumptions absurd, but so are the conclusions: there is no involuntary unemployment, markets are fully efficient, and redistribution has no real consequence. But, while government policies, according to this school, are ineffective, that matters little. Because markets are always efficient, there is no need for government intervention. More perniciously, many supporters of this view, when confronted with the reality of unemployment, argue that it arises only because of government-imposed rigidities and trade unions. In their "ideal" world without either, there would, they claim, be no unemployment."

Via Mankiw

A Conversation With Steven Colbert

Via Mankiw

Hvorfor er økonomi svært at forstå for ikke økonomer?

I en udemærket og kort artikel (via marginal revolution) forklarer en antropolog at der basalt set er fire måder at interagere med andre mennesker på, og den måde som økonomer bruger til at se på verden på, via priser og udbud-efterspørgsel er kommet til som den sidste. Han har derudover, som et ekstra kryderi, et kort afsnit om Danmark:

"The Danes pride themselves on being fair," he said. "They can't understand why they don't get along with their Middle Eastern immigrants."

But Fiske does: "The immigrants expect authority ranking. The Danes expect strict equality matching. Each side sees people constantly violating the models."