Redirect


This site has moved to http://economistsview.typepad.com/
The posts below are backup copies from the new site.

November 28, 2012

Latest Posts from Economist's View


Latest Posts from Economist's View


Climate Change and Hurricane Sandy

Posted: 31 Oct 2012 12:24 AM PDT

Is there a link between climate change and hurricane Sandy?:

Did Climate Change Cause Hurricane Sandy?, by Mark Fischetti, Scientific American: If you've followed the U.S. news and weather in the past 24 hours you have no doubt run across a journalist or blogger explaining why it's difficult to say that climate change could be causing big storms like Sandy. Well, no doubt here: it is.
The hedge expressed by journalists is that many variables go into creating a big storm, so the size of Hurricane Sandy, or any specific storm, cannot be attributed to climate change. That's true, and it's based on good science. However, that statement does not mean that we cannot say that climate change is making storms bigger. It is doing just that—a statement also based on good science, and one that the insurance industry is embracing, by the way. (Huh? More on that in a moment.)
Scientists have long taken a similarly cautious stance, but more are starting to drop the caveat and link climate change directly to intense storms and other extreme weather events, such as the warm 2012 winter in the eastern U.S. and the frigid one in Europe at the same time. They are emboldened because researchers have gotten very good in the past decade at determining what affects the variables that create big storms. Hurricane Sandy got large because it wandered north along the U.S. coast, where ocean water is still warm this time of year, pumping energy into the swirling system. But it got even larger when a cold Jet Stream made a sharp dip southward from Canada down into the eastern U.S. The cold air, positioned against warm Atlantic air, added energy to the atmosphere and therefore to Sandy, just as it moved into that region, expanding the storm even further.
Here's where climate change comes in. ... [more] ...

Links for 10-31-2012

Posted: 31 Oct 2012 12:06 AM PDT

'The Philosophy of Economics'

Posted: 30 Oct 2012 12:11 PM PDT

Dan Little is a philosopher of social science:

The philosophy of economics, by Dan Little: The philosophy of economics intersects with several different areas of philosophy, including the philosophy of science, ethics, and social philosophy. (Dan Hausman is the leading expert in the philosophy of economics. His The Inexact and Separate Science of Economics is a recent contribution.) The field is concerned with methodology, values, and substance.
The primary focus of the field is on issues of methodology and epistemology—the methods, concepts, and theories of economists. What kind of knowledge is provided by the discipline of economics? How is economic knowledge justified or confirmed? How does it relate to other social sciences and the bodies of knowledge contained in those disciplines?
Second, philosophy of economics is concerned with values—the values of human welfare, social justice, and the tradeoffs among priorities that economic choices require. Economic reasoning has implications for justice and human welfare; more importantly, economic reasoning often makes inexplicit but significant ethical assumptions that philosophers of economics have found it worthwhile to scrutinize.
Finally, the philosophy of economics is concerned with substance—what might be called the ontology and theoretical space of economics. Here philosophers have expressed interest in the institutions and structures through which economic activity and change take place, and have turned a critical eye to the assumptions economists often make about institutions and social processes. Are there alternative institutions through which modern economic activity can proceed? What are some of the institutional variants that exist within the general framework of a market economy? What are some of the roles that the state can play within economic development so as to promote efficiency, equity, productivity, and growth?
In thinking about the philosophy of economics it is worthwhile dwelling briefly on the intellectual role played by philosophy of economics. Philosophers are not empirical researchers; and on the whole they are not formal theory-builders. So what constructive role does philosophy have to play in economics? There are several. First, philosophers are well prepared to examine the logical and rational features of an empirical discipline. How do theoretical claims in the discipline relate to empirical evidence? How do pragmatic features of theories such as simplicity, ease of computation, and the like, play a role in the rational appraisal of a theory? How do presuppositions and traditions of research work to structure the forward development of the theories and hypotheses of the discipline? Further, philosophers are well equipped to consider topics having to do with the concepts and theories that economists employ—for example, rationality, Nash equilibrium, perfect competition, transaction costs, or asymmetric information. Philosophers can offer helpful analysis of the strengths and weaknesses of such concepts and theories—thereby helping practicing economists to further refine the theoretical foundations of their discipline. In this role the philosopher serves as a conceptual clarifier for the discipline, working in partnership with the practitioners to bring about more successful economic theories and explanations.
In this aspect philosophers can serve as intelligent critics of the coherence and empirical and theoretical credibility of the theories and approaches that economists put forward. In order to accomplish this goal, the philosopher of economics has a responsibility that is parallel to that of the philosopher of biology or philosopher of physics: he or she must attain a professional and rigorous understanding of the discipline as it currently exists. The most valuable work in the philosophy of any science proceeds from the basis of significant expertise on the part of the philosopher about the "best practice," contemporary debates, and future challenges of the discipline.
So far we have described the position of the philosopher as the "underlaborer" of the economist. But in fact, the line between criticism and theory formation is not a sharp one. Economists such as Amartya Sen and philosophers such as Daniel Hausman have demonstrated that there is a very constructive crossing of the frontier that is possible between philosophy and economics; and that philosophical expertise can result in significant substantive progress with regard to important theoretical or empirical problems within the discipline of economics. The cumulative contents of the journal Economics and Philosophy provide clear evidence of the productive engagements that are possible when philosophy meets economics.
One issue stands out for special philosophical attention -- the role of values in economics. Economists often portray their science as "value-free"—as a technical analysis of the demands of rationality in the allocation of resources rather than a specific set of value or policy commitments. On this interpretation, the economist wishes to be understood as analogous to the civil engineer rather than the transportation policy maker: he or she can tell us how to build a stable bridge, but not where, when, or why to do so. It is for citizens and policy makers to make the judgments about the public good that are needed in order to decide whether a given road or bridge is socially desirable; it is for the technical specialist to provide design and estimate of costs. But philosophers doubt that economics is in fact value-free, or that it should aspire to being so. Here is an earlier post that considers recent thinking about this issue.

'Romney Expands False Jeep-to-China Ad Campaign'

Posted: 30 Oct 2012 10:47 AM PDT

Contra Romney's claims:

Marchionne Weighs In on Jeep Flap, Washington Wire: Fiat/Chrysler Group Chief Executive Sergio Marchionne told company employees in an email that production of Jeep sport utility vehicles will not be moved from the U.S. to China, in his first formal response to a controversy ignited last week when Republican presidential candidate Mitt Romney told a rally in Ohio that Chrysler was contemplating such a move. ...

The Romney campaign has been told this is false. The response:

Romney expands false Jeep-to-China ad campaign, by Greg Sargent: Mitt Romney's new television ad suggesting that the auto bailout will result in American jeep jobs getting shipped to China has been widely pilloried by news organizations, both nationally and in Ohio. The Romney campaign's response: It is expanding the ad campaign.
A Dem source familiar with ad buy info tells me that the Romney campaign has now put a version of the spot on the radio in Toledo, Ohio — the site of a Jeep plant. The buy is roughly $100,000, the source says.
The move seems to confirm that the Romney campaign is making the Jeep-to-China falsehood central to its final push to turn things around in the state. The Romney campaign has explicitly said in the past that it will not let fact checking constrain its messaging, so perhaps it's not surprising that it appears to be expanding an ad campaign based on a claim that has been widely pilloried by fact checkers. ...

As Steve Benen put it, this episode demonstrates more clearly than any other yet that Romney "believes we've entered a post-truth era and the disincentive has disappeared — he can repeat falsehoods with impunity without fear of consequences."

This falsehood is particularly pernicious — it plays on people's fears for their livelihoods. As I noted earlier today, the president of a United Auto Workers local that oversees workers at the Jeep plant says that after Romney first claimed Jeep was moving production to China, the union received a bunch of calls from workers worried about their jobs.

Ultimately, this may be Romney's only recourse. ...

The mainstream media is getting dissed big time by the Romney campaign. Romney and company do not appear to have any fear that the media will be able to counter their false assertions (and this is far from the only example). I worry that the media is not up to the task, but nevertheless I hope this one bites back.

Romney's Regressive Plan for Social Security

Posted: 30 Oct 2012 09:34 AM PDT

Via email:

The Best Political Case Against Romney (Which Obama Hasn't Made): Probably the election's biggest shocker is the Obama campaign's virtual silence on what is Democrats' single best issue and, as this Bloomberg piece explains, the clearest proof that Romney's agenda puts the wealthy over the middle class.
Bloomberg explains that Romney's Social Security plan puts 10 times the burden on the middle class than it does on the rich. While all the focus has been on explicit tax bills, Romney's Social Security plan is like a $1,000 tax hike for a $45k/year worker, or 2.3% of wages. That's 10 times the implicit 0.23% tax hike for a $1 million earner.
This goes a long way to explaining why Romney is leading on the economy; Obama has been so focused on the invisible parts of Romney's agenda, he has never pointed out the smoking guns that would have -- and still can -- destroy Romney's credibility as an advocate for the middle class.
Without the wealthy paying their fare share of a Social Security fix, it would be quite forceful to hit Romney's plan to raise the retirement age to nearly 70, which is OK for Mitt's banker friends, but not so much for police officers, miners and those who do physical work.
The kicker is that Ryan said at the VP debate the Romney's Social Security cuts hit the "wealthy" and Romney says they target higher income workers. This is simply false. The attached Bloomberg piece linked to above shows that the cuts would almost certainly hit the top 70% of earners -- as low as $30k/yr. Ryan made the same "wealthy" claim about his 2010 plan -- here at the 1:15 mark.
Romney's Social Security plan provides the substantive evidence that makes the rest of his agenda look suspect. Romney's carried interest loophole does the same thing in a way that is quite powerful: Instead of analyzing his plans, we can see his actions since he started running for president.
You may recall that when Romney started running in 2007, Democrats began trying to close this loophole that lets investment managers pay less than half the regular income tax rate on a big part of their compensation.
Keep in mind that Romney's top economist Greg Mankiw wrote back in 2007 that preferential tax treatment of carried interest was unjustified. Further, even 3 out 4 on Wall Street say it is welfare for millionaires (Investment pros see Romney's tax break as welfare for the Mitt ).
So we know that Romney has netted millions from this loophole since he started running for president, while his rich donors have netted billions and it has cost the government about $15 bil.
Bottom line: Romney calls this deficit a "moral issue" yet he's been receiving millions in welfare for millionaires while calling for healthcare cuts for the poor and uninsured and calling for retirement age hikes for Social Security and Medicare. Though he is personally generous, it is mind-boggling that his moral compass has been pointing at everyone but himself and his donors.
Next, Romney must be the first presidential candidate in history running on plan to increase the number of uninsured -- by 45 million, according to a Commonwealth study. Getting rid of ObamaCare's backstop and hiking Medicare's retirement age will leave a gaping hole in the safety net that millions in the middle class will fall through.
When you add this all up and consider that Romney has been running for president for 6 years but won't reveal details of his tax, deficit, healthcare & immigration plans, it is clear that his assurances don't count for much.

[Let me add this from pgl at Econospeak: Social Security: Romney Rehashes Robert Bennett's Regressive Plan.]

No comments: