Things Economists Agree On • Hacker News Board

Re: Things Economists Agree On

#31

Post by silentOpen » Sat, Oct 30, 2010, 3:05 AM UTC

tocomment wrote: post #23

What does this one mean? "If the federal budget is to be balanced, it should be done over the business cycle rather than yearly. (85%)"

The federal budget process and the economic reality on the ground are out of phase. To achieve stability in the system, these processes need to be brought more into phase.

Put another way: the budget contains a de facto representation of the current economic position as well as economic "velocity" and higher derivatives. In forming the budget, legislators encode these values. In many cases, these values over- or under-shoot reality with poor consequences.

tl;dr: Balancing the budget is a stabilization criterion and bringing the active driver into synchrony with the driven body (the economy) should improve stability.

Re: Things Economists Agree On

#32

Post by protomyth » Sat, Oct 30, 2010, 3:11 AM UTC

sliverstorm wrote: post #4

I'm curious about the "Eliminate Agriculture Subsidies" one. I don't know enough to give a good opinion, but it seems to me like that could wind up pricing basic, quality food out of the hands of the poorest people, and they'd either have problems with starvation or be forced to eat junk. I mean, maybe I'm wrong, but I could have sworn it was The Man that is keeping eggs down at around $3/dozen and milk around $4/gal…

I often wonder in conversations like this how many people have actual backgrounds in agriculture? Yes, in some states milk is price regulated and subsidized. Sometimes to keep prices low and sometimes to keep prices high (it kinda depends on the place - yes, screwy and in the same place people argue about the reasons). Messing with subsidies will raise input costs to a lot of businesses, much like rising truck transport costs.

Generally someone will pull out this local plots / in city farms and forget a lot of basic economic truths about mass production and transportation.

Re: Things Economists Agree On

#33

Post by jerf » Sat, Oct 30, 2010, 3:41 AM UTC

johnny22 wrote: post #11

dantheman wrote: post #8

Earlier quoted context omitted.

The government has very little to do with keeping food inexpensive, in fact through various forms of subsidies and tariffs they make some foods more expensive - sugar vs corn syrup. Also: Myth #3: Maintaining a cheap and stable food supply. Some contend that food markets would fluctuate wildly without farm subsidies. In reality, food prices of both subsidized and unsubsidized crops are relatively stable. Given that t…

can you quote something a little less biased?

Given the level of agreement, you will have a hard time finding much disagreement from any source.

I would even suspect that a significant number of those who "disagree" disagree more on technicalities than on the general idea that the US's agricultural subsidies are a bad idea as implemented. For instance, I could argue:

1. A free market economy tends to surprisingly precisely match production to demand; producing extra costs you more than your competition is spending and tends to drive you out of business.

2. Food is subject to unpredictable random failures on a large scale.

3. It is better to have too much food than too little.

4. The economic effect of a subsidy is to cause overproduction. (As opposed to price fixing, which is to cause shortage. Rather a lot of verbiage is expended on the internet trying to explain away these two facts, yet the facts remain.)

Therefore, it may actually be desirable strategically for a country and even for the species to subsidize food production, in the hopes that the excess will offset the unpredictable disasters that a free market would tend to produce very little slack for. This will cost the society as a whole more than a "precise match" produced by the free market, but it only takes one bad harvest for this insurance to pay off bigtime. This could lead an economist to vote "disagree" on principle, even if they probably would agree the current subsidy is not an efficient way of accomplishing this goal. As others have pointed out, slamming this to a "true/false" question does erase many of the finer distinctions.

But other than those directly monetarily benefiting and those who don't understand the economics well enough to understand how bad these things are, you're not going to find much thoughtful support of these subsidies as they currently exist.

Re: Things Economists Agree On

#34

Post by kiujhgbnj » Sat, Oct 30, 2010, 3:41 AM UTC

dstorrs wrote: post #30

kiujhgbnj wrote: post #24

Interesting that all economists seem to be pro-business, anti-tax, anti-worker rights. You would almost think that most economists worked at banks or for university business schools. In other research naval officers believe in a larger navy with lots of ships

Yep, many economists do work for those institutions. And yep, all of them have /some/ particular axe to grind (everyone does -- I do, you do, etc). That doesn't mean that what they're saying isn't correct. - Businesses are, in fact, what generates most of the wealth and innovation in a country - Taxes, whether personal or corporate, are not economically efficient. Government can be compared to an electrical grid -- t…

But it does suggest that economics is just politics by another name.

A survey of doctors would presumably agree on the function of an organ, a survey of hospital administrators might also agree on the need to cut treatment costs - this doesn't mean the opinions are equally accurate.

Re: Things Economists Agree On

#35

Post by nhebb » Sat, Oct 30, 2010, 3:47 AM UTC

Interesting that most of these were fiscal and regulatory policies, but no monetary policies held a broad consensus. I would have thought there would be more consensus on interest rates and money supply.

Re: Things Economists Agree On

#36

Post by dkarl » Sat, Oct 30, 2010, 4:01 AM UTC

kiujhgbnj wrote: post #24

Interesting that all economists seem to be pro-business, anti-tax, anti-worker rights. You would almost think that most economists worked at banks or for university business schools. In other research naval officers believe in a larger navy with lots of ships

Economists pursue productivity single-mindedly and forget that their freedom to think about productivity and nothing else is based on the assumption that certain moral abuses are outlawed. Only the most deluded ideologue really thinks that economic efficiency just happens to coincide with human moral values. Sure, if you bring up eight-year-olds working in coal mines, a few people will say, "But that must have been caused by government interference, because eight-year-olds working in coal mines is really quite economically suboptimal! I can tell it's economically suboptimal because thinking about it makes me feel bad!" But they are in the minority. Most economists take for granted that economic productivity should be pursued only in a context in which certain moral wrongs are outlawed.

I pointed out in an earlier thread that the sales department will agree with you that systems reliability affects the bottom line, but when it comes to setting priorities, they'll fight tooth and nail to get all engineering resources dedicated to new products and features, and zero dedicated to reliability and infrastructure. It's the same with economists: they agree in principle that there should be laws enforcing basic human decency, but when push comes to shove they can't bring themselves to subordinate economic considerations. It's garden-variety déformation professionnelle. They have a hard time accepting that the value they dedicate their professional lives to is occasionally in conflict with something higher.

Re: Things Economists Agree On

#37

Post by sliverstorm » Sat, Oct 30, 2010, 4:23 AM UTC

panic wrote: post #9

sliverstorm wrote: post #4

I'm curious about the "Eliminate Agriculture Subsidies" one. I don't know enough to give a good opinion, but it seems to me like that could wind up pricing basic, quality food out of the hands of the poorest people, and they'd either have problems with starvation or be forced to eat junk. I mean, maybe I'm wrong, but I could have sworn it was The Man that is keeping eggs down at around $3/dozen and milk around $4/gal…

In that case, why not spend the subsidies on reducing taxes for those poorest people, or on giving them benefits in other ways?

Notice that subsidizing the 'best' foods basically gives the poorest people a break ONLY when they eat good foods. Which may not be such a bad thing. Notice food stamps already do much the same thing. I personally know I would much rather subsidize a poor guy buying milk and bread than a poor guy buying donuts or alcohol.

Re: Things Economists Agree On

#38

Post by joelmichael » Sat, Oct 30, 2010, 4:45 AM UTC

splat wrote: post #15

I find it rather strange that even predictions that should be fairly clear-cut and straightforward (e.g. "A ceiling on rents reduces the quantity and quality of housing available.") only get around 9/10 agreement. As a non-economist, I would have thought that a seemingly simple (and testable!) question like that would be like polling physicsts with the question "Does F = ma?". And I would sure hope that more than 93%…

There are people who think the Earth is flat, but they aren't called physicists; yet Marxists are still called economists.

Re: Things Economists Agree On

#39

Post by wisty » Sat, Oct 30, 2010, 4:51 AM UTC

jerf wrote: post #33

johnny22 wrote: post #11

Earlier quoted context omitted.

can you quote something a little less biased?

Given the level of agreement, you will have a hard time finding much disagreement from any source. I would even suspect that a significant number of those who "disagree" disagree more on technicalities than on the general idea that the US's agricultural subsidies are a bad idea as implemented. For instance, I could argue: 1. A free market economy tends to surprisingly precisely match production to demand; producing e…

Governments could buy up large strategic reserves of grain and twinkies. They've done this since Joseph and the Technicolor Dreamcoat.

Overproducing beef and corn syrup won't be as efficient. In fact, it might even bring on the "random failure", by screwing up the water table.

Re: Things Economists Agree On

#40

Post by mdda » Sat, Oct 30, 2010, 5:24 AM UTC

kiujhgbnj wrote: post #34

dstorrs wrote: post #30

Earlier quoted context omitted.

Yep, many economists do work for those institutions. And yep, all of them have /some/ particular axe to grind (everyone does -- I do, you do, etc). That doesn't mean that what they're saying isn't correct. - Businesses are, in fact, what generates most of the wealth and innovation in a country - Taxes, whether personal or corporate, are not economically efficient. Government can be compared to an electrical grid -- t…

But it does suggest that economics is just politics by another name. A survey of doctors would presumably agree on the function of an organ, a survey of hospital administrators might also agree on the need to cut treatment costs - this doesn't mean the opinions are equally accurate.

The labelling that you've chosen "pro-business, anti-tax, anti-worker rights" is politics itself.

The economists are more accurately characterized by 'anti-distortion'. The amount of distortion that should be accepted (for instance, to protect the disabled) is a matter of politics, but the article only addresses consensus issues.