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Monday

17

November 2014

0

COMMENTS

No, The World Is Not Running Out of Chocolate

Written by , Posted in Free Markets

A Washington Post headline blares “The world’s biggest chocolate-maker says we’re running out of chocolate.” No such thing is happening, but this is a good opportunity to talk about prices and how they work.

First, the story. It begins hysterically:

There’s no easy way to say this: You’re eating too much chocolate, all of you. And it’s getting so out of hand that the world could be headed towards a potentially disastrous (if you love chocolate) scenario if it doesn’t stop.

Indeed, there are reasons to believe that supply is decreasing:

Chocolate deficits, whereby farmers produce less cocoa than the world eats, are becoming the norm. Already, we are in the midst of what could be the longest streak of consecutive chocolate deficits in more than 50 years. It also looks like deficits aren’t just carrying over from year-to-year—the industry expects them to grow. Last year, the world ate roughly 70,000 metric tons more cocoa than it produced. By 2020, the two chocolate-makers warn that that number could swell to 1 million metric tons, a more than 14-fold increase; by 2030, they think the deficit could reach 2 million metric tons.

The problem is, for one, a supply issue. Dry weather in West Africa (specifically in the Ivory Coast and Ghana, where more than 70 percent of the world’s cocoa is produced) has greatly decreased production in the region. A nasty fungal disease known as frosty pod hasn’t helped either. The International Cocoa Organization estimates it has wiped out between 30 percent and 40 percent of global cocoa production. Because of all this, cocoa farming has proven a particularly tough business, and many farmers have shifted to more profitable crops, like corn, as a result.

So they’re on to something, right? Seems “disastrous” indeed! Not so fast.

The article presumes that demand exists in a vacuum and is entirely divorced from prices. Current demand is simply a reflection of how much chocolate we want to eat, the thinking goes, and therefore reduction in supply means that some will go without. The horror!

The reality is far more mundane. Demand is actually very price dependent, and cannot be interchanged with desire. People have always desired more chocolate than is produced, just not at the actual price of chocolate. Consider this thought experiment: how much chocolate would people eat if the cost were zero? Surely, a lot more than they do now. It would make little sense to claim chocolate to be running out in this scenario, though, seeing as how it is constantly being produced, though some would have trouble acquiring it. That’s because it would be under-priced.

What happens in reality is that prices reflect demand vis a vis supply, such that an equilibrium price develops where the demand from willing buyers equals the supply from willing sellers. Some of the people who would eat chocolate at zero cost would not do so at $1, and more would not do so at $5, or $10, etc. In other words, the fact that more chocolate is being eaten than produced simply means that the current price is below the equilibrium price. Price increases would cause demand to decline and, if increased enough, entirely end the “deficit” caused by over consumption.

Prices don’t just influence consumers. Higher prices would encourage production of more cocoa, as well as efforts to find new and cheaper ways to do so. In fact, the Post article acknowledges later on, where after the initial emotional blitz the author becomes more sober in his analysis, that these forces are already coming to bear:

Efforts to counter the growing imbalance between the amount of chocolate the world wants and the amount farmers can produce has inspired a bit of much needed innovation. Specifically, an agricultural research group in Central Africa is developing trees that can produce up to seven times the amount of beans traditional cocoa trees can.

In other words, it’s just run of the mill market forces at work. There’s no cause for panic. Chocolate is not going anywhere, though it might cost you a little bit more for a while.

Tuesday

4

November 2014

0

COMMENTS

Don’t Abolish Midterms Just Yet

Written by , Posted in Big Government, Election Time, Waste & Government Reform

A New York Times op-ed by a Duke professor and a student argues that midterm elections are passé. A cynic might conclude something about the timing of this realization – that it coincides with an election in which the party favored by academia (and the New York Times) is likely to receive an electoral shellacking. But the argument is worth taking at face value, so let’s consider it on the merits.

Schanzer and Sullivan say that midterms once made sense, but that times have changed. For one, they argue that the need for close electoral accountability has diminished thanks to modern technology:

Twitter, ubiquitous video cameras, 24-hour cable news and a host of other technologies provide a level of hyper-accountability the framers could not possibly have imagined. In the modern age, we do not need an election every two years to communicate voters’ desires to their elected officials.

Perhaps. Communicating with elected officials is certainly easier than ever before, as is taking the pulse of the electorate, but does greater access to public desires translate into legislative results? I find that politicians are most concerned about public views come election time. Longer terms for House members would thus reduce incentives for representatives to adhere to public desires.

Reading between the lines, one gets the impression that’s precisely what the authors want. They worry over the fact that “Americans’ confidence in the ability of their government to address pressing concerns is at a record low,” and grumble that the “main impact of the midterm election in the modern era has been to weaken the president.” Indeed, it appears to be any obstacle to an imperial presidency that most motivates the authors.

“The realities of the modern election cycle,” they complain, “are that we spend almost two years selecting a president with a well-developed agenda, but then, less than two years after the inauguration, the midterm election cripples that same president’s ability to advance that agenda.”

In other words, this appears to boil down to the standard statist complaint over “gridlock.” Though they also throw in some identity politics for good measure:

Another quirk is that, during midterm elections, the electorate has been whiter, wealthier, older and more educated than during presidential elections. Biennial elections require our representatives to take this into account, appealing to one set of voters for two years, then a very different electorate two years later.

Again, a cynic might note that the kind of voters the authors would prefer politicians stop appealing to tend to favor an ideology and party that academia (and the media) loathes. But not to worry, they have a solution:

There’s an obvious, simple fix, though. The government should, through a constitutional amendment, extend the term of House members to four years and adjust the term of senators to either four or eight years, so that all elected federal officials would be chosen during presidential election years. Doing so would relieve some (though, of course, not all) of the systemic gridlock afflicting the federal government and provide members of Congress with the ability to focus more time and energy on governance instead of electioneering.

For many, anything that limits the energy politicians spend on governance – that is, the time spent imposing their whims on the rest of us – is likely to be a good thing. Gridlock, in other words, is a feature rather than a bug.

Political tools tend to be blunt instruments, and attempts to solve societal problems through the political process are often hamfisted and counterproductive. Certainly some problems need political solutions, but there is good reason for the process to be arduous and time consuming. The impulse of individual politicians in the face of any problem is to preen and overreact in order to demonstrate that they are “doing something.” It is up to institutions, then, to slow things down and force deliberation into the process. If midterm elections contribute to that process, then they are a net positive.

Tuesday

14

October 2014

0

COMMENTS

Sunday

5

October 2014

0

COMMENTS

Minimum Wage Follies

Written by , Posted in Economics & the Economy, Free Markets

The great Krugtron the Invincible argues the minimum wage can be increased without much consequence. He says there’s “hardly any cost to raising it,” and that “we can raise these wages without losing lots of jobs.” Notice the weasel language. We can raise it without losing “lots” of jobs, but regardless of what he subjectively considers to reach the “lots of jobs” threshold, there will unarguably be a lose of some jobs.

Bringing in some data, Antony Davies at the Mercatus Center demonstrates that as relative minimum wages have increased, so to has unemployment rates for those with anything less than a college diploma.

Min wage vs Unemployment by edu

So Krugman’s job is safe, but plenty of those poor folks he claims to champion will feel the warm, fuzzy benefits of his proposal all the way to the unemployment line.

In the latest episode of Hotnomics, host Emerald Robinson looks closer at the numbers and lays out the evidence against raising the minimum wage.

Friday

19

September 2014

0

COMMENTS

Is Secession Acceptable Again?

Written by , Posted in Culture & Society, Foreign Affairs & Policy, Liberty & Limited Government

An interesting aspect of yesterday’s vote for Scottish independence is that it has Americans discussing political separation without all the unwanted historical baggage of the Civil War and race relations. That is, there have been substantive discussions even among Americans on the pros and cons of Scotland leaving the United Kingdom (they ultimately voted to stay) without anyone claiming the very idea of secession to be racist, as so often happens when it is considered within the United States.

Even though the Scottish vote resulted in affirmation of the union that forms the United Kingdom, the orderly acceptance of the vote stands in stark contrast to the threats of violence that come in response to even idle talk in the US. Just suggest that a state might leave the union, and you won’t have to wait long for indignant statists to wag their fingers and sarcastically warn about “how well that went last time.” In other words, try to leave the union and they’ll wage war upon you and burn your cities to the ground. In the name of unity, naturally.

If the British, who once fought a war to prevent the American colonies their independence, can agree that they want no unwilling subjects and indicate they would have accepted without bloodshed the will of the Scottish people to secede, then is it not time for Americans to stop threatening violence at long-shot prospects of political separation?

Thursday

18

September 2014

0

COMMENTS

Is Government Threat of Punishment Keeping Private Universities from Cutting Tuition?

Written by , Posted in Big Government, Economics & the Economy, Education

Federal policies unquestionably deserve some blame for skyrocketing tuition costs. Washington subsidizes student borrowing, and colleges in turn raise prices to capture federal dollars. Higher prices put pressure on Washington to increase subsidies and the cycle repeats.

But there are obviously other forces at work as well. In a typical market you would expect competition to drive prices down, for instance. However, cutting prices doesn’t have the expected effect. Ike Brannon explains:

[W]hy don’t private colleges simply reduce tuition and reap the benefits? Indeed, a few colleges have done precisely that, and have been rewarded with a sharp spike in applicants the first year or two afterwards.

However, the gains from such a tuition reduction are short-lived: the typical pattern from a unilateral price cut is that by the third year the market has forgotten the gauzy rhetoric behind the price reduction and perceives the cut-rate tuition as an indicator of an inferior good, and applications decline.

Colleges in this way act as a Veblen good, meaning demand is proportional to price, rather than inversely proportional as we would expect from the law of supply and demand. Colleges with higher tuition are perceived as more prestigious and of higher quality and afford their alumni bragging rights. Thus, slicing tuition in a vacuum can reduce demand.

But one college president proposed a solution that would benefit consumers. Unfortunately, the government sprung to action and threatened him with legal repercussions:

Private colleges can cut tuition and avoid such a death spiral, but only if they do so in concert. However, the specter of a few dozen private colleges organizing to reduce prices — which might seem like an unmitigated good to parents — risks the ire of the Justice Department, which launched an investigation when a college president suggested such an idea at a public conference. College presidents don’t like being told by an officer of the government that they’re risking jail time, and any nascent discussions quickly ceased.

The government has criminalized “price fixing” in the name of protecting consumers. But as we see here, good intentions mean little once government bureaucrats with tunnel vision are brought into the equation. Regardless of the rule’s intent, prosecutors are prepared to punish colleges for potentially agreeing to lower tuition despite both its obvious benefit to consumers and the action’s alignment with stated policy goals.

Government policies helped create the problem of exorbitant tuition costs, and now it is actively working to prevent others from solving it. To quote Ronald Reagan, “government is not the solution to our problem; government is the problem.”

Saturday

30

August 2014

0

COMMENTS

Risks Come in Many Forms

Written by , Posted in Big Government, Culture & Society, Foreign Affairs & Policy, Gun Rights, Liberty & Limited Government, The Nanny State & A Regulated Society

The New York Times editorial board has some sound advice for Great Britain as it worries about the threat of home grown terrorists. It’s a serious problem, and one which the UK has largely invited on itself through a failed experiment in cultural appeasement that has only served to embolden extremism. Be that as it may, NYT editors are right to warn against overreactions that undermine civil rights by concluding that, “scrapping civil liberties should not be the first line of defense in a democracy.”

Terrorists pose a safety risk, and mitigating that risk should be done with respect to civil liberties rather than trampling them. But there are a great many risks in society, and unfortunately the NYT editorial board fails to consistently apply this principle on other issues. They have no problem curtailing rights for the illusion of security when doing so confirms their ideological biases, such as limiting speech in the name of removing money from politics, or scrapping the Second Amendment in the name of reducing violence.

In fact, just a day before sternly warning the Brits against overreacting to their homegrown extremism problem, the very same New York Times editorial board overreacted to a single gun accident caused by the irresponsibility of parents and an instructor that allowed a young girl who couldn’t handle the weapons and its kickback to shoot an Uzi, ultimately resulting in the instructor’s death. Not only did they use the unusual incident to finger wag at defenders of the Second Amendment and note in horror all the various ways in which gun enthusiasts enjoy their hobby, but they also demanded the restriction of rights in response. Citing a similar incident over half a decade ago (giving indication to  how rare these events are) where a young child accidentally killed himself at a gun range, the NYT editors praised his state of Connecticut for reacting by banning access to certain guns even at gun ranges for those under 16, regardless of the level of supervision, precautions taken, or capabilities of the shooter. They then lamented that there will be no “swift action in Arizona, where the gun culture is deeply entrenched.”

Rights are precarious things. They are at their most vulnerable when the populace is scared. The New York Times recognizes this when it comes to foreign threats, but fails to understand that domestic panics over extremely low risks of harm are just as dangerous.

Thursday

21

August 2014

0

COMMENTS

Case for Police Reform is Bigger Than Ferguson Shooting

Written by , Posted in The Courts, Criminal Justice & Tort

Facts are slowly trickling out regarding the Michael Brown shooting by Ferguson officer Darren Wilson. Not only has it now been determined that Brown was involved in an earlier strong-arm robbery – which speaks to Brown’s state of mind and makes it more plausible that he would engage an officer in violent conflict – but it’s also being claimed by some sources that officer Wilson suffered serious injuries in the alleged scuffle. The latter is far from proven, however.

This is important information for this particular case and those that want to ensure justice is done. It does not, however, tell us anything about the need for criminal justice reforms. Even if the shooting of Michael Brown was justified, it does not absolve the nation’s police as a whole, or even the Ferguson police in particular, of wrongdoing. The Ferguson PD would still be responsible for unnecessarily inflaming tensions through a combination of unnecessary and excessive displays of force, and a lack of timely communication.

But don’t take my word for it. Here’s what Max Geron, a security studies scholar who runs the Media Relations Unit of the Dallas Police Department had to say:

The images from Ferguson, Missouri are disturbing and disappointing to those who recognize their role in law enforcement as servants of the public as opposed to strict enforcers of the law, maintainers of order or members of a paramilitary organization. While enforcing the law is a primary function and order maintenance is a part of that job, they are but components of the larger public servant role. Additionally, while police agencies are paramilitary in nature, law enforcement leaders now, more than ever, need to guard against the increase of militarization currently underway.

I’m disheartened that police unions and associations across the country are concerned about citizens photographing police while in public and have no qualms about speaking out against it. This adds to the concern of the public that we are moving more towards a police state and slowly eroding the freedoms we should cherish in this great nation.

Thursday

14

August 2014

0

COMMENTS

Lack of Police Accountability Will Breed More Ferguson’s

Written by , Posted in Culture & Society, The Courts, Criminal Justice & Tort

A number of troubling things are happening related to the unrest in Ferguson, Missouri. In the wake of the shooting death of 18-year old Michael Brown at the hands of a police officer, there have been looting, riots, and demonstrations. While theft and mindless destruction of property by looters shouldn’t be tolerated, residents have more than enough reason to be upset.

Witness descriptions paint Brown’s shooting as a deliberate homicide, yet police have refused to release the name of the officer who killed him. The police department predictably claims that Brown was the instigator and inexplicably attempted to take the officer’s gun, but police are notorious liars who routinely falsify reports to cover up wrongdoing. Sometimes they are punished, but given the frequency with which such actions are discovered, it’s quite likely that it far more often goes unnoticed. While it’s certainly possible that police are telling the truth in this case and that the witnesses are lying to get them in trouble, the public has every reason not to give them the benefit of the doubt.

It is, in other words, the constant and pervasive lack of accountability for police departments across the country that fuels tensions and distrust. Even when misconduct is clear, the thin blue line often serves to protect officers from punishment. The result is a frustrated public that sees little hope of justice when police misbehave. The casual dismissal of public concerns only fuels the notion that police don’t believe they serve anyone but themselves.

Often times misconduct and false reports are only discovered when video later comes to light. It would thus be of significant public interest for police to be monitored by video at all times. When a small California city put cameras on all their police officers, the result was a dramatic decline in the number of complaints against officers. Police, like their civilian counterparts, misbehave less when they are more likely to be caught.

Others rightfully highlight the growing militarization of police forces across the US. Federal grants have encouraged local police departments to acquire weapons of war for domestic use. Tiny towns are getting funds to build SWAT teams and armored vehicles for which they have no need, and then are predictably deploying them in situations where such extreme tactics are not only unwarranted, but can be counterproductive.

Given the excessive deference by prosecutors for police wrongdoings and the fact that police are being handed weapons of war to use against the public, the only surprise that should come from the events in Ferguson is that such unrest is not already more common. If things continue as they are without significant reform of policing in the US, we can expect these confrontations to continue to happen.

Tuesday

5

August 2014

0

COMMENTS

Government Accuses Gay Bar of Anti-Gay Discrimination for Enforcing Government ID Requirements

Written by , Posted in Big Government, Culture & Society, Identity Politics, Liberty & Limited Government

Government lovers and practitioners of identity politics are eating their own according to Scott Shackford at Reason:

What happened last summer is that a gay man named Vito Marzano, dressed in drag from a fundraiser elsewhere, wanted to enter the Wrangler. He was denied entry. The bar claims it wasn’t because he was cross-dressing but because his image didn’t match his driver’s license. The bar had been previously cited for serving somebody underage and were now being extra cautious. For those not in the know, gay bars have a history of being targets of scrutiny by authorities looking for excuses to raid them and shut them down.

This is an important point. Arbitrary and overzealous enforcement has been a common tactic for government agents to harass certain minority populations, like gay communities. Allowing in customers who do not match their ID is a sure fire way to invite such government harassment.

Equally disturbing is the logic used by the government to determine that there was “discrimination.” The bar, it seems, dares to cater to the interests of a particular subset of the gay community known as “bears,” or burly masculine men who prefer other burly masculine men.

The state’s report notes that the bar has a dress code forbidding high-heeled shoes, wigs or appearance-altering make-up or strong perfumes. While the report states there’s nothing wrong with the dress code itself, it has determined that the bar uses this code as an excuse to exclude overly feminine women or transgender people. The Wrangler is a “bear” bar, whose target demographic is the burlier of the gay men. What’s alarming about the ruling is that it seems to act as though catering to a particular demographic is in fact evidence of a likelihood of discriminating against others:

“[T]he Respondent caters to a gay subculture known as “Bears,” which are bisexual or gay males which tend to place importance on presenting a hypermasculine image andoften shun interaction with men who exhibit effeminacy. This is evident from the pictures and statements made by employees regarding the “Bear” culture of the club and several links on the Respondent’s webpage referencing “Bear” clubs … .”

Emphasis added by me because WT-bloody-F? You know what gay people love? Having the government tell them how their various subcultures work and think on the basis of talking to a bunch of people at a bar and looking at pictures. The preference for dating or friendship with certain types of people is not the same as “shunning” other types of people. And to the extent that there are social rifts between various parts of the gay demographic, nobody should want the state government policing how they should be interacting with each other.

In a truly free and diverse society, outlets meeting niche needs would be welcomed along side those serving a more general population. But in a world of degenerative Progressivism, words such as  “diversity” and “discrimination” have been twisted to the point of almost meaning their literal opposites. Diversity now requires universal sameness – all locations must serve the same clients in the same way. Discrimination now refers to any perceived negative action against a special identity group – such as the enforcement of ID requirements – even as the same action is routinely used against non-protected classes without fuss, making anti-discrimination efforts inherently discriminatory.

Shackford ends with the most important point:

This case is a good demonstration as to why it’s so important to hold a hard line on the right to freedom of association. The Wrangler should have the right to pursue whatever customer demographic it wants for its bar. And if the community finds it significantly discriminatory, they can use social pressures to push for change (as Marzano has apparently done with a call for a boycott).

Freedom, not central government control and more power for bureaucrats, is the answer.