Archive for December 30th, 2009

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So are you fed up yet? I am

December 30, 2009

Lynne Kiesling

Another reason I’ve been staying away from the computer over the holidays is that between the Senate health care bill process, the futilely constructivist quest for government policy to stimulate the economy, proposals for financial regulation, and the craven stupidity of TSA policy proposals after the Christmas day bomb failure, I am fed up and disgusted with pretty much everything having to do with economic policy.

Of course, the frustrating thing with all of these issues is that I am so fed up and annoyed and disgusted, but feel so powerless. It’s not enough to call my so-called elected representatives and tell a staffer that I am fed up and disgusted. Democratic politics is so soul-sucking in this way that I am focusing my mental and emotional energy on the areas where I can find meaning and can see a difference due to my efforts. Sadly, though, I do feel like I’m fiddling while the republic is burning around me.

One meme has recurred in my reading over the past couple of days, particularly at Bruce Schneier’s blog where he discussed the Christmas bomb attempt, Christopher Hitchens on the TSA and how good we are at collective punishment of the innocent, and Bruce Schneier talking with Jeffrey Goldberg at the Atlantic: it’s increasingly hard to escape the feeling of being terrorized by our own government. And not just at the airport.

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Crandall & Winston on financial regulation

December 30, 2009

Lynne Kiesling

My thanks to Arnold Kling for the link to this October Forbes article from Robert Crandall and Clifford Winston remarking on financial regulation. They point out, correctly, that the re-examination and soul searching about macroeconomics in which we are currently engaged overlooks the great insights and policy successes that microeconomics-based deregulation have brought to the U.S. economy:

Nothing in the last two years has undermined microeconomic analyses that influenced the deregulation of the airline, trucking, railroad, natural gas, crude oil, telecommunications and cable television markets. These deregulatory successes have not been compromised by the market failures that originated in the financial sector and are at the heart of the Krugman lament. But even if Krugman could uncover a theory that integrates irrational exuberance in financial markets with macroeconomic performance, it would hardly guarantee improved performance of government regulators. Nor would it enhance our considerable knowledge of how markets correct after sharp downturns.

I do think that Crandall and Winston overlook the crucial role that government policy had in fomenting “irrational exuberance in financial markets”, and therefore call it more of a “market failure” than I would, but it’s still a good piece and a good reminder of the benefits that economic deregulation has created in several industries over the past three decades. In particular, Randall and Winston point out that markets provide consumers with adaptation opportunities that they can use as their information and knowledge increase — a fancy way of saying that as individuals take actions in sharp downturns (such as saving more and shoring up their balance sheets), information about those adaptations ripple through markets through price signals and other means.

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Thanks for the KP design input

December 30, 2009

Lynne Kiesling

I’ve been staying away from the computer for most of the past two weeks — our vacation and then the relaxing holidays at home have been more about reading and knitting and spending time with the KP Spouse. But I have spent the past several hours tweaking the KP design on the dimensions that I didn’t like, that Mike didn’t like, and based on your helpful feedback on my earlier post on the matter.

I’m really, really keen on the image that I created for the header banner; to me it symbolizes self-organizing systems and decentralized coordination. It also has symmetry, balance, and order, so it invokes for me the themes of complexity and emergent order that inspire my thinking, whether it’s from complexity science, Austrian economics, the Scottish Enlightenment, new institutional economics, or technological change.

I hope you and yours are enjoying your holidays.

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