Excellent post, Vic. I've been meaning to write a post like that, but quite frankly I've forgotten too much economics to do so. Many economic reductionists like to simplistically talk about the math of supply and demand curves and their near religious faith in them in a vacuum. If I recall the theories are only valid when you have numerous in many ways otherwordly assumptions, of which you have mentioned many. Another big assumption.that may be subsumed under the ones you mentioned, is that no one will use government or politics to interfere with the workings of markets. Talk about utopian. I really think that simplistic economic teahing in highschool and college goes a long way toward explaining the wide aceptance of tremendous poverty by people of otherwise goodwill in this rich society.
Hey Jorge, love the sig. Now that I get the joke, it's pretty fun! Your last post wasn't very funny though. What gives?
From the Department of Labor http://www.bls.gov/oco/ocos069.htm There is no over supply of teachers and as a matter of fact some states are increasing their incentives including signing bonuses for students to become teachers. Another T.J. fallacy EXPOSED
You also haven't been sent to a country of 120 degree heat, separated from all the comforts of home and family and everything therein; a country where local nationals can kill you at any time (invading and occupying someone's country tends to, oh, I don't know, piss off the locals). I thought even you might agree on something like this. Pay cut or no, give them the money. I don't agree with this war but if you're gonna engage in corporate welfare (so that the big companies who get to keep their money can write the Prez bigger checks for the election year) then the least the government can do is NOT nickel and dime the soldiers sent to the Mideast to (ahem) "liberate the Iraqi people" (*cough cough* bills**t! *cough*)
Unless schools on the supply-side accounted for the demand side externality and adjusted wages appropriately, we wouldn't eliminate the externality. However, if suppliers were profit maximizers -- which the free market requires for efficiency -- they would NOT eliminate the externality. Even if everything works perfectly in the market, rational people will not cure the externality. This isn't something to "generally agree" with, this is something that Coase got a freakin' Nobel Prize for recognizing and spelling out! I could whip out the math, but I'll spare you guys. I don't understand how your "quasi-free" market is defined, and I don't believe a free market could exist in education unless schooling was not compulsary. At any rate, schooling is not the issue I wanted to bring up. I just wanted to mention that the idea that free markets unambiguously promote efficiency has become quite a cliche in this administration and is simply incorrect. One of my friends worked at the CEA this summer, and she was pretty disturbed by the amount of politicization and discarding of sound economic reasoning. She said that just using one of a number of buzzwords like "free markets" or "competition" would immediately get approbation from the White House, whether or not the underlying idea was fundamentally sound. This is the blind following of "free markets" that really worries me. And it doesn't even bring into account the equity arguments against free markets, which I acknowledge are ideological, so I won't argue those. glynch, thanks. The thing about this is, even when you talk about it in an ideal world, the math tells you that market failure can and will exist! When you look at the real world, it's even uglier. Friendly Fan, Batman - thanks too. on a seperate note, (and I realize this is probably the wrong forum), are there any DC area Rockets fans out there? The season's almost starting and there are too many bars in this town and too many televised games!
while you're uncovering grounbreaking articles on cheesesteaks, others around here are concerned with slighly more important issues.
Excellent work, swtsig. Two one sentence posts in a row. Don't you have a keg party or a mixer to attend, frat boy?
Don't sweat it Sig....Those GDI's are just mad they have to WORK for frat boys and they never got invited to the mixers.....hehehehe
Damn, Vik, do you have a PhD. in economics? or what? Hey can you give us your take on the lead headline in the Houston Chronicle, saying essentially that Bush stated that we have had enough tax cuts to spur the economy. What has happened? Has he really screwed up the bond market? Is it just pr like his recent trips in the last week to some wilderness to show what an environmentalist he is? Is he now just trying to show that he is for a balanced budget?.
Actually I thought his post above yours was a pretty good one. Sometimes you don't need more than one scentence to make a point.
Vik, the economic principles advanced at the political level are just that, principles. They are not pure, clean economic theories, but simply parts of them which are applicable to an approximation to a free market economy. Free markets is a term often used as an antonym of regulation. Clearly, no one is referring to a *perfectly* competive, free market system, but as I have stated, an approximation of such. They are using it in the layman's context, not in the economist's. Vik, there are many variables which you have ignored in your analysis, which are important. You insist on moving the debate to the demand side of the picture, while ignoring the fact that there are a ton of people out there *willing* to work as a teacher at today's non-externality adjusted wage. Increasing the wage to adjust for the externality will only strengthen the supply of teachers, thereby reinforcing my point. The bottom line is this: I am not advocating a perfectly free market -- that is not practical. However, selected principles underlying a free market system, such as deregulation, privatization, elimination of racial quotas, elimination of welfare, and the breaking up of labor unions are items that I feel are relevant to the economy.
I wasn't aware that people were still debating the efficiency of free markets. Yeah, there is market failure, no one doubt there was just a recession after all. But the question is what caused the market failure? The market all by itself? In this case, I don't think so. I look at the relentless pumping of money by the Fed into the economy as the culprit. We are lucky not to be like Japan. But are economy is much more flexible (ie we have MORE free market medicine) so we were able to bounce back more quickly. (Although whether we have bounced back is unclear.)
Vik has been schooling Trader_Jorge, in a way . T_J, I agree with most things you posted in your last post, but immediate elimination of welfare would result in so much social unrest that any positive effects would be negated.
uh no. The Pentagon is recommending this, and the administration has referred all questions to the Pentagon report. The President has control over the Pentagon. Also, Trader....this is a paycut. I was in the Army and there are clearly defined payscales. This is not bonus pay. This is duty pay for a serious amount of increased work and hardship...and is often requested by soldiers because the payscale is very well defined. The equivalent is to tell a shift worker that overtime pay is no longer 1.5x, but 1.0x, and then to tell them that they must keep working overtime. That is a paycut. I cannot believe you would call that a bonus. That is total lack of respect for the increased duty and hardship required of being in the field like that.
And here i was lead to believe that economics was your strong suit: Supply and demand don't apply to the army, as they are designated "Unmet Public Goods", and are an essential part of society with, note, no competition. If you want to defend your country, there are no competitive armies hiring to establish a market based wage; they are completely at the mercy of the government. Also, as they are committed in a super-contractual manner; enforced by more than possible lawsuits for breach of contract should they fail to meet the established time of the contract, as they are subject to cuts like this in which 'labor' has no say, nor ar they entitled to seek alternative earnings elsewhere, and as they are subject to extensions of duty over which, as we know, they have no control, then how on earth does anyone who understands anything about economics say that this applies? And weren't you among those who, when soldiers in Iraq complained earlier, talked about how they are a seperate part of society subject to seperate rules? But when there pay is vut, you drag them in with the rest of us, even when, lacking competition, they are not part of it...interesting. If the army were, in fact, subject to supply and demand, they would be a monopoly, and a legally enforced one at that.
MacBeth, weren't you here yesterday? Jorge doesn't actually mean anything he says on the board. He got you again.
Lol! If I 'swung' and missed as often as he does, I'd want that as a fall back too. But I thought everyone agreed that economics was his serious topic...
Maybe I got it wrong. As I understood it yesterday from people who claimed to understand him, he doesn't actually believe in anything. Apparently he just likes to get people to talk about him (We're doing it again!! "Underwear." Ah!! Got me again, the stinker!) and any pretend argument about anything serious is just a scam. As far as we know he could be a gay communist with a wicked sense of humor. I mean, that's how I understood it and he's been around and hasn't corrected that assumption. In fact, my very own quote is his signature now (I can't figure out who owns who, but these new rules are confusing!). I used to think he was for free markets, supported Bush, supported the war, etc, but it's apparently all just a really clever internet game. Now all I know is, since I used to take him at his word that he actually believed in stuff, he must just be smarter than me and doesn't believe any of that stuff at all. I mean, it's either that or he's the clueless, gutless wonder I always thought he was. But that can't be so. rimbaud and all those other guys wouldn't steer me wrong. Right?
I suspect it will come and go as the occassion warrents. I still think that T_J was probably a little hurt and surprised that his arguments were so comprehensively dismissed by even those who support him. I will give him the benefit of the doubt and assume that he's not a one trick pony...at least not that one trick ( )...Frankly I am caring less and less the more we discuss this. He never warrented that much attention until he was the one quacker who came in here still but continually ducked the issues. The rest were pretty much divided into those who came in and didin't completely duck, or those who just ducked the whole forum when the going got tough. That was why he became something of a focus, at least for me. If it's all a game of ' Under where?' for him...what a hobby is all I can say. And before rimmy, SJC, or someone else equally 'neutral' points out that we have now made a couple of posts saying how we don't care about T_J, we are, I think, more talking abou the whole idea of wasting everyone's time by joke posting as serious...and trying to figure out where the line will be drawn. Maybe SJC or rimmy could tell me; it would be yet another opportunity for them to reveal what big fans of mine they are...
