6 ms·

Examples of how Cato has been discredited?

by mmmurf 18y ago

mdasen 18y ago
Cato tends to be a little simplistic in their models. For example, with immigration they say it has no ill effects. Well, in the long-run I'd probably agree with them (save for the fact that natural resources are being split among more people which I think would be made up for in other ways that they cite). In the short term, it takes time for economies to adapt to changing tastes, changing spending patterns, essentially the changing makeup of the marketplace. And that does cause friction in the short term. Likewise, as much as I defended the abolition of rent control in MA in my earlier comment, it caused a lot of short-term friction that was really chaotic. A better plan would have been to phase market rent in. Landlords had been under rent control for so long that when it was lifted, prices could double or triple. BAD! If you, however, say for the next 10 years you can raise prices by up to 15% per year and then in the 11th year you can charge whatever you want, you avoid the friction that occurs when sudden changes happen. I'm not someone who thinks we should defend dying industries or mess with pricing a lot, but market economies don't do well with instability. Instability randomly reallocates money from some to others. For example, if you lend me money at a 20-year fixed rate of 7%, the future could randomly reallocate money between us. If interest rates drop, you get lots of money. If interest rates rise, I save a lot of money. Heck, if inflation reaches 9%, you're loosing tons of money! Random reallocation is a bad thing and stability ensures that random reallocations are kept to a minimum. I dislike the American auto industry, but I'd like to see its death be a lot slower than those who are strictly libertarian. What do you do with a million workers? Well, plenty, but you don't do it fast. However, if the number is in the thousands of workers per year, its easier to find ways to employ them as new industries get created. Heck, even other companies might want to buy pieces of the American auto industry, but can't afford the whole thing. Honda and Toyota might see this as an opportunity to get a new plant or two. Tesla motors might be able to raise the capital in a few years to do more. But an all-at-once situation just creates friction and chaos. Maybe Cato is right and I'm wrong, but I appreciate stability. I appreciate knowing that everything isn't coming to an end even if I'm loosing out on 5% for that stability. Discredited (as the original author claimed) is harsh, but I think economics is a little more nuanced than any pure philosophy.
- Prrometheus 18y ago
  I see that you disagree with their viewpoint, but I don't think that you "discredit" them.
- mmmurf 18y ago
  Immigration: I don't think you really disagree with Cato. Arguing that immigration restrictions should be eliminated does not necessarily entail that one believes the restrictions should be lifted all at once. Rent Control: Rent control causes higher prices for everyone except those who happen to have a rent-controlled apartment, because it discourages improvement of existing properties and discourages building new properties. It also encourages over-buying. Someone may pay $2000/month for a 3 bedroom apartment that has been rent controlled since the 1970s, but only use 1 of the bedrooms. That person could find a 1BR apartment within budget w/o rent control, and someone (maybe 3 room-mates paying $1500 each) could share the 3BR place. Overall this is a more efficient distribution of resources, the benefit of which occurs immediately. I don't really feel sorry for someone getting a huge apartment for way below market price. Interest Rates: I'm not sure I understand what you mean, since interest rates vary based on unpredictable Fed action and unpredictable market forces all the time. Banks (lenders) hedge against this by buying/selling instruments to even out their Fed risk and by buying insurance to hedge against many of the other risks. American Auto Industry: What makes you think there would be a chaotic "all at once" situation? That is part of the fearmongering on the part of the firms seeking rents (and the politicians they have bought). Recall how Dubya told everyone that if the US didn't invade Iraq there was an "imminent threat to US national security"? The automakers used that exact strategy to obtain a bailout. Stability is an interesting concept. It's the essence of "conservatism", wanting to preserve the status quo. Marx warned about this in his manifesto. Anyone who has managed to get a leg up will fight to preserve it at the expense of productive change. In today's world, this includes the people who thought they were investment geniuses because the value of their home increased 40% the year after they bought it, it includes the overpaid workers who convince themselves that a hard working person immigrating to the US is somehow unamerican, it also includes the politicians who enjoy the huge donations they have been getting from the financial services industry and don't want to see endangered. So if you put aside the "I want to keep my small advantage at all cost" conservatism, and you do away with the Bush-style fearmongering about imminent threats to "stability", what you find is that the world really isn't all that scary, and often times the meddling that is done to try to prevent "instability" actually does far more harm than good. The Iraq war is a case in point. Note that "stability in the middle east" is the motto of those who want to go and turn it upside down with bombs and nation building! The same applies to domestic policy.
logjam 18y ago
Oh my. Two minutes of web search: http://www.accuracy.org/article.php?articleId=51 http://www.accuracy.org/article.php?articleId=51 http://www.cato-unbound.org/2008/11/12/matthew-yglesias/politics-compromises-the-libertarian-project/ http://www.cato-unbound.org/2008/11/12/matthew-yglesias/poli... http://davidbrin.blogspot.com/2006/05/cato-hypocrisy.html http://davidbrin.blogspot.com/2006/05/cato-hypocrisy.html http://www.socsec.org/publications.asp?pubid=325 http://www.socsec.org/publications.asp?pubid=325 http://www.sierraclub.org/sierra/200207/thinktank.asp http://www.sierraclub.org/sierra/200207/thinktank.asp http://www.acsh.org/publications/pubID.498/pub_detail.asp http://www.acsh.org/publications/pubID.498/pub_detail.asp http://www.no-smoke.org/pdf/catoinstitute.pdf http://www.no-smoke.org/pdf/catoinstitute.pdf http://www.fair.org/index.php?page=1409 http://www.fair.org/index.php?page=1409 http://www.iwpr.org/pdf/CATORIB.PDF http://www.iwpr.org/pdf/CATORIB.PDF http://www.exxonsecrets.org/html/orgfactsheet.php?id=21 http://www.exxonsecrets.org/html/orgfactsheet.php?id=21 http://www.allacademic.com/meta/p_mla_apa_research_citation/1/9/0/5/9/p190590_index.html http://www.allacademic.com/meta/p_mla_apa_research_citation/... http://yglesias.typepad.com/matthew/2005/01/im_friends_with.html http://yglesias.typepad.com/matthew/2005/01/im_friends_with.... http://www.businessweek.com/bwdaily/dnflash/dec2005/nf20051216_1037_db016.htm http://www.businessweek.com/bwdaily/dnflash/dec2005/nf200512... http://legacy.library.ucsf.edu/tid/vdh56a00 http://legacy.library.ucsf.edu/tid/vdh56a00 http://www.nationalreview.com/comment/comment-fonte050902.asp http://www.nationalreview.com/comment/comment-fonte050902.as... http://www.skepdic.com/refuge/junkscience.html http://www.skepdic.com/refuge/junkscience.html http://en.wikipedia.org/wiki/Steven_Milloy http://en.wikipedia.org/wiki/Steven_Milloy http://web.archive.org/web/20011122034255/http://www.tnea.org/pages/comm/taxref.htm#Cato%20report http://web.archive.org/web/20011122034255/http://www.tnea.or... http://www.pkarchive.org/global/swedenomics.html http://www.pkarchive.org/global/swedenomics.html http://www.atimes.com/atimes/Asian_Economy/EG12Dk01.html http://www.atimes.com/atimes/Asian_Economy/EG12Dk01.html Trying to pretend that Cato in practice is anything but a shill for big business (including, in particular, the fucking tobacco industry) and the greedy is moronic.
- mmmurf 18y ago
  How does opposing the automotive bailout and the financial bailout constitute being a shill for big business? I'd say it's quite the opposite!

Examples of how Cato has been discredited?

by mmmurf 18y ago

Examples of how Cato has been discredited?

Cato tends to be a little simplistic in their models. For example, with immigration they say it has no ill effects. Well, in the long-run I'd probably agree with them (save for the fact that natural resources are being split among more people which I think would be made up for in other ways that they cite). In the short term, it takes time for economies to adapt to changing tastes, changing spending patterns, essentially the changing makeup of the marketplace. And that does cause friction in the short term. Likewise, as much as I defended the abolition of rent control in MA in my earlier comment, it caused a lot of short-term friction that was really chaotic. A better plan would have been to phase market rent in. Landlords had been under rent control for so long that when it was lifted, prices could double or triple. BAD! If you, however, say for the next 10 years you can raise prices by up to 15% per year and then in the 11th year you can charge whatever you want, you avoid the friction that occurs when sudden changes happen. I'm not someone who thinks we should defend dying industries or mess with pricing a lot, but market economies don't do well with instability. Instability randomly reallocates money from some to others. For example, if you lend me money at a 20-year fixed rate of 7%, the future could randomly reallocate money between us. If interest rates drop, you get lots of money. If interest rates rise, I save a lot of money. Heck, if inflation reaches 9%, you're loosing tons of money! Random reallocation is a bad thing and stability ensures that random reallocations are kept to a minimum. I dislike the American auto industry, but I'd like to see its death be a lot slower than those who are strictly libertarian. What do you do with a million workers? Well, plenty, but you don't do it fast. However, if the number is in the thousands of workers per year, its easier to find ways to employ them as new industries get created. Heck, even other companies might want to buy pieces of the American auto industry, but can't afford the whole thing. Honda and Toyota might see this as an opportunity to get a new plant or two. Tesla motors might be able to raise the capital in a few years to do more. But an all-at-once situation just creates friction and chaos. Maybe Cato is right and I'm wrong, but I appreciate stability. I appreciate knowing that everything isn't coming to an end even if I'm loosing out on 5% for that stability. Discredited (as the original author claimed) is harsh, but I think economics is a little more nuanced than any pure philosophy.

Prrometheus 18y ago
I see that you disagree with their viewpoint, but I don't think that you "discredit" them.
mmmurf 18y ago
Immigration: I don't think you really disagree with Cato. Arguing that immigration restrictions should be eliminated does not necessarily entail that one believes the restrictions should be lifted all at once. Rent Control: Rent control causes higher prices for everyone except those who happen to have a rent-controlled apartment, because it discourages improvement of existing properties and discourages building new properties. It also encourages over-buying. Someone may pay $2000/month for a 3 bedroom apartment that has been rent controlled since the 1970s, but only use 1 of the bedrooms. That person could find a 1BR apartment within budget w/o rent control, and someone (maybe 3 room-mates paying $1500 each) could share the 3BR place. Overall this is a more efficient distribution of resources, the benefit of which occurs immediately. I don't really feel sorry for someone getting a huge apartment for way below market price. Interest Rates: I'm not sure I understand what you mean, since interest rates vary based on unpredictable Fed action and unpredictable market forces all the time. Banks (lenders) hedge against this by buying/selling instruments to even out their Fed risk and by buying insurance to hedge against many of the other risks. American Auto Industry: What makes you think there would be a chaotic "all at once" situation? That is part of the fearmongering on the part of the firms seeking rents (and the politicians they have bought). Recall how Dubya told everyone that if the US didn't invade Iraq there was an "imminent threat to US national security"? The automakers used that exact strategy to obtain a bailout. Stability is an interesting concept. It's the essence of "conservatism", wanting to preserve the status quo. Marx warned about this in his manifesto. Anyone who has managed to get a leg up will fight to preserve it at the expense of productive change. In today's world, this includes the people who thought they were investment geniuses because the value of their home increased 40% the year after they bought it, it includes the overpaid workers who convince themselves that a hard working person immigrating to the US is somehow unamerican, it also includes the politicians who enjoy the huge donations they have been getting from the financial services industry and don't want to see endangered. So if you put aside the "I want to keep my small advantage at all cost" conservatism, and you do away with the Bush-style fearmongering about imminent threats to "stability", what you find is that the world really isn't all that scary, and often times the meddling that is done to try to prevent "instability" actually does far more harm than good. The Iraq war is a case in point. Note that "stability in the middle east" is the motto of those who want to go and turn it upside down with bombs and nation building! The same applies to domestic policy.

logjam 18y ago

Oh my. Two minutes of web search: http://www.accuracy.org/article.php?articleId=51 http://www.accuracy.org/article.php?articleId=51 http://www.cato-unbound.org/2008/11/12/matthew-yglesias/politics-compromises-the-libertarian-project/ http://www.cato-unbound.org/2008/11/12/matthew-yglesias/poli... http://davidbrin.blogspot.com/2006/05/cato-hypocrisy.html http://davidbrin.blogspot.com/2006/05/cato-hypocrisy.html http://www.socsec.org/publications.asp?pubid=325 http://www.socsec.org/publications.asp?pubid=325 http://www.sierraclub.org/sierra/200207/thinktank.asp http://www.sierraclub.org/sierra/200207/thinktank.asp http://www.acsh.org/publications/pubID.498/pub_detail.asp http://www.acsh.org/publications/pubID.498/pub_detail.asp http://www.no-smoke.org/pdf/catoinstitute.pdf http://www.no-smoke.org/pdf/catoinstitute.pdf http://www.fair.org/index.php?page=1409 http://www.fair.org/index.php?page=1409 http://www.iwpr.org/pdf/CATORIB.PDF http://www.iwpr.org/pdf/CATORIB.PDF http://www.exxonsecrets.org/html/orgfactsheet.php?id=21 http://www.exxonsecrets.org/html/orgfactsheet.php?id=21 http://www.allacademic.com/meta/p_mla_apa_research_citation/1/9/0/5/9/p190590_index.html http://www.allacademic.com/meta/p_mla_apa_research_citation/... http://yglesias.typepad.com/matthew/2005/01/im_friends_with.html http://yglesias.typepad.com/matthew/2005/01/im_friends_with.... http://www.businessweek.com/bwdaily/dnflash/dec2005/nf20051216_1037_db016.htm http://www.businessweek.com/bwdaily/dnflash/dec2005/nf200512... http://legacy.library.ucsf.edu/tid/vdh56a00 http://legacy.library.ucsf.edu/tid/vdh56a00 http://www.nationalreview.com/comment/comment-fonte050902.asp http://www.nationalreview.com/comment/comment-fonte050902.as... http://www.skepdic.com/refuge/junkscience.html http://www.skepdic.com/refuge/junkscience.html http://en.wikipedia.org/wiki/Steven_Milloy http://en.wikipedia.org/wiki/Steven_Milloy http://web.archive.org/web/20011122034255/http://www.tnea.org/pages/comm/taxref.htm#Cato%20report http://web.archive.org/web/20011122034255/http://www.tnea.or... http://www.pkarchive.org/global/swedenomics.html http://www.pkarchive.org/global/swedenomics.html http://www.atimes.com/atimes/Asian_Economy/EG12Dk01.html http://www.atimes.com/atimes/Asian_Economy/EG12Dk01.html Trying to pretend that Cato in practice is anything but a shill for big business (including, in particular, the fucking tobacco industry) and the greedy is moronic.

mmmurf 18y ago
How does opposing the automotive bailout and the financial bailout constitute being a shill for big business? I'd say it's quite the opposite!