Sunday, 26 January 2014


This will be a short post. I haven't posted much lately but I've kept on reading some eco-blogs and my blood boiled when I saw an article on 'The Grumpy Economist' (John H. Cochrane's blog) where John first uses a straw-man and then proceeds to tearing it up so as to prove that liberals are just loonies.

I guess we are all guilty of simplifying our opponents' positions from time to time to better laugh at their ineptitude. But controlling for this bias is what makes for good productive debate. I don't expect it from politicians on a re-election trail... I do think it should be the standard for econo-blogging.

The first part of the article is pretty good and is underlying some of the reasons we might think that raising the minimum wage won't affect poverty rates too much. I pretty much agree with the specifics but, while I am not actually a big supporter of minimum wage, I also know that raising it can be done for reasons other than reducing poverty. It could be done to boost AD, for example...

But it's the second part, where John quotes John Goodman that really got me upset. To quote: 

"OK, if inequality in the US is the problem, what is the logical consequence? John notes we now tax wealthy people who want to leave but

...when a wealthy person expatriates, the distribution of income and wealth becomes more equal. Should we reverse course and encourage the John Templetons of this world to get out of town. If equality is a serious goal, we should at least relax the penalties.

At the other end of the income ladder, consider poor immigrants. Every time one comes to our shore, the distribution of income [within the US] becomes more unequal. But the same could be said if the immigrant is rich. Any immigrant who isn't earning close to the average income is going to make the distribution less equal as a result of his immigration. If equality is a serious goal, we definitely need a different immigration policy".

You know what would also reduce the degree of inequality within a given country? Killing all the very rich and all of the very poor. That would be the most efficient policy ever to get your inequality down. Since the liberals don't propose such a policy, they can't be very serious about inequality... QED.

Also, on a technical point, it's one of the problem with taking a measurement (level of inequality) and making it a goal.

But I am afraid such a subtle argument would be too much for John Cochrane... unless it was in support of his socially conservative prior, of course. In which case, he'd get it within a split second.

I got friends who are conservative and I got no problems with them. Because, unlike Cochrane, they are not intellectually dishonest.