Big Bag ... too big

Adam Smith is quoted by Thought du Jour on inequality

No society can surely be flourishing and happy, of which the far greater part of the members are poor and miserable. It is but equity, besides, that they who feed, cloath and lodge the whole body of the people, should have such a share of the produce of their own labour as to be themselves tolerably well fed, cloathed and lodged.
Adam Smith, Wealth of Nations (1776), Book I, Chapter 8, paragraph 35.

I don't think this has that much to do with inequality ("fair share" or "equal share") per se as it is about poverty. You could say it's about a living wage, but the ability of working people to meet their needs "tolerably well" hardly says anything about preventing the wealthy from buying multiple McMansions.

A different view of trade vs. aid: which one do you want as your friend?

Mr Meles’s contempt for what he calls the “neoliberalism” of the West is as plain as his admiration for “generous” and “dependable” China. ... The Europeans and Americans find this galling, since they continue to pay for many of Ethiopia’s hospitals and schools, as well as handing out free food. But trade between Ethiopia and China is increasingly what matters. It was worth $800m in the first six months of this year, up by 27% on last year. China has invested $2.5 billion in Ethiopia, mostly in infrastructure.

Easterly's logic test (a test that has offended a surprising number of commenters)

2. Some nut somewhere is a fan of the economist Friedrich Hayek. Therefore it follows that: (a) since I like Hayek, I am a nut, (b) you can logically prove that Hayek  is a talk show host (c) Hayek’s ideas make possible a free society in which nuts say nutty things, but you can ignore them.

Speaking of whom, the IMF is starting to sound remarkably Austrian:

The seeds of the crisis were sown, in large part, in the five years before the crisis. Between 2003 and 2008, much of the region experienced a boom in bank credit, asset prices, and domestic demand. ... while the influx of capital boosted growth, it also led to rising imbalances and vulnerabilities.... Boom-bust credit cycles can be very costly, so it is essential to prevent credit booms from getting out of hand.

They have yet to adopt Austrian solutions, however.

In an increasingly rare moment of solidarity, the New York Senate and Assembly unanimously passed an autism insurance bill. I am uncertain of the details, but the press blurb is that it should "require coverage of evidence-based treatments like speech therapy, occupational therapy, physical therapy and applied behavior analysis. S7000B also insures that coverage for behavioral therapy cannot be denied because it is deemed educational or habilitative in nature." Gov. Paterson became the second governor after Mark Sanford to veto such legislation. Sanford was overridden. There's some good money on the second and soon to be former governor being overridden as well.

On the difficulty of trying to please everybody, or the problem with being a pragmatist, or The Obama Paradox.

Cato (via Newmark) on the impacts of McCain-Feingold:

Kenneth Vogel offers an unexpected insight into the nature of campaign finance regulation:

“[Wisconsin Senator Russell] Feingold faces an uphill battle against a novice opponent, who, perhaps ironically, has been the beneficiary of hundreds of thousands of dollars in ads attacking Feingold that would have been prohibited had McCain-Feingold remained intact.”

In other words, if Feingold’s campaign finance law had not proven to be contrary to the U.S. Constitution, he might well not be facing “an uphill battle” to serve a fourth term in Washington. The political speech that is causing Feingold problems would have been prohibited in that situation.

"Satellite dishes amid the tin-roofed shacks of El Salvador. So much for Maslow's hierarchy."


Courtesy Mankiw, Hennessey fights Goolsebee's statistics with other statistics. It makes me want to see Iron Chef Statistician: Whose descriptive methodologies will reign supreme? Video below the fold: