42 mil

Greg Mankiw has made millions off the $280 textbook Principles of Microeconomics. Specifically, $42 million.

I’ve read that textbook. It’s atrocious — full of “rational actors,” questionable statements at odds with reality, and gems like this.

The effects of taxes on welfare might at first seem obvious. The government enacts taxes to raise revenue and that revenue must come out of someone’s pocket. As we saw in Chapter 6, both buyers and sellers are worse off when a good is taxed: A tax raises the price buyers pay and lowers the price sellers receive. Yet to understand more fully how taxes affect economic well-being, we must compare the reduced welfare of buyers and sellers to the amount of revenue the government raises. The tools of consumer and producer surplus allow us to make this comparison. Our analysis will show that the cost of taxes to buyers and sellers typically exceeds the revenue raised by the government.

Why, you might ask, would one read a four hundred page textbook that one knows to be full of bogosity?

Have to know the enemy to fight the enemy is why.

That Mankiw made $42 million off that turd is ipso facto proof enough that our entire economic system is broken.


Ocean Ramsey freediving with a whale shark.

Yes, her name really is “Ocean.” Talk about nominative predestination.

Reminds me of my youth, swimming the Ichetucknee and Santa Fe Rivers. Back then, I could hold my breath for 2+ minutes while actively swimming. Sometimes I’d swim 15-20 feet to the bottom and grab a rock or handhold and let the current pull my arm taut and just watch.

Used to freak my grandparents out how long I could stay under and how far I could swim (I’m fast — big legs and feet).

Says here that Ocean can hold her breath for over five minutes. Goddamn.


The problem with economics — related to 90% of it being bunk — is that you have to check every little statement assiduously for error. Especially if they are from the University of Chicago, for instance. I read the paper, too, but the interview is easier to write about in this forum. So check this out, and cringe.

If wages were really as modestly sticky as we estimate from the local level, wages should have fallen at the aggregate level given the large decline in employment. But we don’t see wages falling, so that tells us there must be a labor supply shock in the background.

We also have decomposition for prices. If it were only a demand shock, prices would have fallen. But prices didn’t, so that tells us there’s some productivity shock in the background. So we use our model in this estimated parameter to quantify the relative contributions of the discount rate shock, the productivity/markup shock, and the leisure shock in the aggregate economy. And we find that the discount rate shock could explain a pretty significant share of the decline in employment in the United States during 2008 and 2009. But it explains close to zero of the persistence — why employment remained low from 2010 through 2012. Instead, you have to look at the productivity/markup and labor supply shocks to explain that.

What in hell.

Labor supply shock? So just coincidentally during the Great Recession, the supply of labor decreased leading to aggregate wage stickiness?

No. Just no. How is even possibly to hypothesize that much less publish that in a peer-reviewed journal?

Now on to prices and demand shock. The problem with examining price data is that most consumption goods are compulsory. For instance, you don’t stop buying toothpaste or rice unless you have absolutely no money at all. Demand for most items won’t change much in a modern Western economy even in a recession, so you must choose which goods you examine to learn anything worth learning.

Big ticket items will find purchasing delayed or avoided altogether so that’s where you must turn.

So let’s look at some of that data.


Notice anything about used car prices during the Great Recession? Yeah, me too.

Here’s durable goods (already falling but fell faster during most of the GR).


Now let’s check out housing prices (well, we all know the story of that but good to see the graph anyway).


About that productivity shock.


See any productivity shock there? Me either. I see a slight decline (really more of a leveling off) and then a large increase during the late stages of the Great Recession.

I’m so glad I’m not an academic so I can say things like this without being cast out of the order and the council: their paper is bullshit and their model is bullshit, and it only took 20 minutes of data-gathering to prove it.

Left lost

Can these people really have such high Idiot Quotients?

We suspect “foreign investment” is an attractive explanation to some because it is grounded in a settler-nativism (the idea that those in Canada now are more entitled to homes than those not yet here).

I absolutely believe that the people already living somewhere have a 100% more valid claim to housing than people immigrating — especially if the home is only lived in a few days or weeks a year, as is true of many Canadian homes purchased by Chinese nationals. And I’d say that if I myself were immigrating somewhere. (And I’d also say that if they were German nationals, or British nationals or the whitest blindingly whitest of the white nationals from anywhere else.)

And in fact, when I lived in China if I had been denied an apartment because a Chinese citizen had priority I would’ve said, “Yep, that makes complete sense to me!” and moved on.

Look, lefties, your go-to explanation that “everything bad is racism” no matter if that makes sense or not is just not a path to a better world, a real intellectual tradition, or continuing cultural validity.

Ignoring millions of people’s real and valid complaints about globalization and the marginalization of their concerns and communities is just going to stop working, and soon. You are losing the thread and losing the battle, and will lose the war.

(And then you get Trump 2: Way More Effective.)


The left’s conception of racism and racists is as delusional as the right’s ideas of “natural” criminality and some supposed genetic tendency of some ethnicities’ Citrullus preferences.

I won’t say the left and the right are equally stupid. No, that’s clearly wrong and a false equivalence. But the left’s stupidity is of the variety that incapacitates it in dealing with the world as it is, while the right’s is not.

This makes a lot of difference.

Tooked Crimber

This piece and others like it is why usually I don’t read Crooked Timber anymore.

Yes, sure, believe that the only reason to oppose something directly harmful to you like unrestricted immigration is that you are racist. Makes sense. Or even if they are racist, pretend that is not symptomatic of something else — something, oh, perhaps caused by the ten-for-a-dollar intellectuals who faff about in places like Crooked Timber pushing globalization and free-for-all red-in-tooth-and-claw trade, thus devastating communities the CT types would never demeans themselves by visiting.

I would call them pseudo-intellectuals, but alas they are actually intellectuals, just not very good or sagacious ones.

When you have 23 years of education but are still as dense as a box of cadmium, why did you even bother to spend all that time in university?

Slow left

Why Slower Drivers Shouldn’t Hang Out In the Left Lane.

Indeed. Should be legal to lob a Hellfire missile at left-lane lollygaggers. So very dangerous and likely to cause accidents.

How do you get through driving school or being taught to drive without picking up on this? My drivers ed teacher in high school stressed this about, oh, a million times.

And in Florida, if you’re driving like a moron in the left lane at 42mph, people let you know. Oh do they.

Need better journalists

Admittedly, I have some skin in the game because I like PCs and I can’t work on a phone, but this article’s very first statement is just egregiously wrong.

Personal computers have been on their deathbed, but HP Inc. proved this week that the PC market still has some life, at least when it comes to higher-end computers sold under its brand.

No, personal computers have not been on their deathbed. This is a tale told by journalists, full of drama and demise, signifying nothing in the real world.

This data is so easy to find. Why can’t any journalists seem to do it or to understand it when they do? There were 62.4 million PC shipments in Q2 2016. Adjusting for the fact that there always more PCs sold in Q4 due to Christmas in Western countries, worldwide PC shipments will be around 275 million units in 2016.

Sound like a dead market to you? Strangely, the journalist includes this very statement in her article and yet rolls on like it’s not there.

The “death of HP’s PC business has been greatly exaggerated,” said Deutsche Bank analyst Sherri Scribner in a note to clients Thursday.

At the bottom of this article is a table of worldwide PC shipments from 1996 onward. Yes, the PC market is declining which is what I’d expect. Most people who currently have PCs don’t really need them as they can barely use them.

However, notice that PC sales have only fallen back to roughly 2007 levels, not cratered into some abyss.

It’ll be many, many years (if ever) before any real work can be done on phones or tablets. Until then, it’ll be PCs for those who need to do something more in and with the world other than Snapchat or look at LOLCats photos.


Fun vocabulary-related test here. Here’s my score with the word I didn’t know. I was 60% sure “marchese” was a word and I even had a good inkling of its definition, but you’re penalized for guessing that something is a word and then getting it wrong, so I didn’t risk it.


Also, my brain is kind of mushy tonight from studying other things so there’s that. (Nope, didn’t cheat at all, though it’d be easy if you wanted to. If I’d wanted to cheat, it wouldn’t have taken me 9.24 seconds to deliberate on that one!)