unsettling economics

The FAA was shut down because of a partisan dispute.  The basic issue was supposed to be the Republican demand that the agency save $16 million by ceasing to subsidize 13 airports with relatively little demand.  Yes, the airports were in Democratic strongholds.

NPR’s Brian Naylor reported that the airports were a bargaining chip.  The real issue was the threat that union power posed for Delta.  The National Mediation Board rejected a practice that counted required a union to win more than half the eligible votes rather than half of the votes cast.

Delta, the only non-union airline, got the Republican bill to include language overturning the National Mediation Board decision.  Since the House leadership refused to budge, the FAA shut down, leaving the government unable to collect $30 million per day in taxes.  Patriotically, most of the airlines continued to collect the tax in the form of higher fares.  However, these “job creators” kept the money so that they could help the economy.  Besides, the government could make up the lost taxes with still more tax cuts.

This brings us back to Delta, which graciously agreed to refund the “taxes” that it collected.  Hopefully, we will reward Delta for this good behavior by supporting the House repeal of the union election rule.

A few days ago, I wrote about the military’s desire to cut back on care for the troops.  Judging by the news, the military has done a good job of avoiding caring for soldiers with traumatic injuries.  The Wall Street Journal just reported that soldiers also suffer from a high rate of arthritis, which is not surprising, given that they must carry heavy weights on uneven terrain.

At least we can be reassured that the soldiers will share the burden with the (most of the) rest of society and that our society is fair.

Lukits, Ann. 2011. “Military Members at Risk for Joint Problems.” Wall Street Journal (26 July).http://online.wsj.com/article/SB10001424053111904233404576458564080952384.html?mod=ITP_personaljournal_1

“U.S. service members are at high risk of early disability from osteoarthritis due to the job’s extreme physical demands, according to a study in Arthritis and Rheumatism.  An estimated 26.9 million American adults have osteoarthritis, the most common form of arthritis in older individuals.  The condition is also associated with traumatic joint injuries.  From 1999 to 2008, first-time diagnoses of osteoarthritis were recorded in active-duty service members from the Army, Navy, Air Force and Marine Corps.  On average, 10,827 cases were diagnosed annually among about 1.4 million service members.”

“Osteoarthritis rates were 26% higher in members age 20 to 24 than in the general population, and twice as high in those over 40, the study found.  Women had 20% higher rates of osteoarthritis than men; blacks had 15% to 26% higher rates than non-blacks.”

“The Army had the highest rate of osteoarthritis, followed by the Air Force, Marine Corps and Navy. Regular knee and hip bending plus strenuous physical activity likely contribute to higher osteoarthritis rates in service members, the study concludes. More research on risk factors in military populations is recommended.”

have never put anything on the blog that must have been as unclear as the post on transcending medieval economics.  The point of what I was trying to make is relatively simple — although, in reality, nothing in such matters is really simple.  During the Enlightenment, people were discovering new things, especially because traders were bringing reports and material goods, from parts of the world that had previously been unknown.  Before that time, true knowledge was presumed to already be in existence, found in ancient texts, such as Aristotle’s.  During the Enlightenment, people were energetically looking around them for new information as well, especially because novel technologies were being developed faster than had been the case previously.  The quotation from Cook was intended to show the similarity between dogmatic nature of education prior to the Enlightenment and what passes as economic education today.

I was asked to supply more information regarding my assertion that the military is worried about medical costs causing undue pressure on its budget and the need to cut back on what it offers to the troops:

Shanker, Thom and Christopher Drew. 2011. “Gates Sees Crisis in Current Spending.” New York Times (14 February). Read more »

Dear President Obama,

The election is nearing.  You have already broken most of your promises.  What are you going to do when you run out of new promises?  May I take the liberty that you hurry up and make some new promises so that people do not lose faith in your capacity to fearlessly break promises, which has been the hallmark of your presidency?

In my new book, Sex, Lies and Economics, about early economics of the late seventeenth and early eighteenth centuries, one of the constant themes is the struggle against the medieval thinking.  Beginning with William Petty, the early economists I am analyzing were following the new science, which emphasized close observation to replace received dogma.  Here is a nice description of how the dogma was presented at the time.  Notice how closely the medieval method resembles the scholastic method that the early economists opposed.  In this sense, we are losing ground.

Matters of exchange: commerce, medicine, and science in the Dutch Golden Age by Harold John Cook:

Read more »

Baskin, Brian and Ben Lefebvre. 2011. “Chevron’s Email ‘Oops’ Reveals Energy Giant’s Sway Over Markets.” Wall Street Journal (16 July): p. B 1.

Baskin, Brian and Ben Lefebvre. 2011. “Chevron’s Email ‘Oops’ Reveals Energy Giant’s Sway Over Markets.” Wall Street Journal (16 July): p. B 1.

http://online.wsj.com/article/SB10001424052702304521304576448202801087220.html?mod=ITP_businessandfinance_0

A Chevron Corp. employee’s email blunder gave a rare—and unintended—glimpse into the inner workings and rich profits of its energy trading operations. The midday email, inadvertently sent Friday to media organizations, contained spreadsheets, tables and charts that gave a breakdown of Chevron’s profits, losses and exposures trading crude and refined products such as gasoline.

Schumpeter, Joseph A. 1954. “The Economic Crisis of the Tax State.” International Economic Papers, 4; reprinted in Schumpeter, Joseph A. 1991. The Economics and Sociology of Capitalism, ed. Richard Swedberg (Princeton: Princeton University Press): pp. 99-140.

“… public finances are one of the best starting points for an investigation of society. The spirit of a people, its cultural level, its social structure, the deeds its policy may prepare — and this and more is written in its fiscal history.” He cites Goldscheid. 1917. Staatsozialismus order Staatskapitalismus. “the budget is the skeleton of the state stripped of all misleading ideologies.”

Following Schumpeter, the budget debates illustrate the kind of life that the rich and powerful wish on the rest of society.  Get rid of the social safety net, destroy unions, turn the clock back to the nineteenth century.  And yes, a bloated military to fight in every corner of the world.

The one area that the Obama is willing to rein in military spending is on medical care for the troops — at least Robert Gates emphasized that approach.

What is weird is that virtually nobody with access to the public media is talking sense.  Even the unions seem to be swallowing the Kool Aid.

We would be better off if we were to be open about one dollar one vote — what H. L. Hunt proposed back in the 50s.  Let the candidates collect their funds, turn the money over to the government, the one with the biggest package wins.  No need for recounts, election frauds, etc.

I have just finished my introduction to the book, which is shaping up.  I would very much appreciate any comments.

intro