Last night I was at a social event with some theatre friends. One person there is widely respected as by far the best tech person in theatre throughout the region -- knowledgeable, creative, industrious, and pleasant to work with. He is also quite possibly a better actor than I might ever hope to be.
I laughed that the only reason I have a role in the upcoming play "Mr. Richardson Was Jesse James,"* was because my friend is such a good tech person and will be doing tech work through the two-week period of the London Fringe Festival.
It's a clear example of what economists call "comparative advantage". He's a better actor and a better tech person than I am, but he can't do everything, so I get some opportunities. He's absolutely better than I am at both (economists call this an absolute advantage) but comparatively he's better at doing tech work. That's his comparative advantage. And my comparative advantage is at acting, even though he could well be a better actor than I am.
Scarcity of his time, means he must choose how to use his time; he can't do both acting and tech work. So he chooses to do the one at which he has a comparative advantage. And so do I.
I know I'm not the best economist in the world, not the best writer, not the best actor, not the best horn player, not the best sportscaster, etc. But I have had comparative advantages in some of these things at various times in my life, meaning I've always been able to enjoy doing them. And as I age some more, it seems altogether reasonable that my comparative advantage will shift to something else.
And that's what trade and exchange are all about -- exploring and adapting to shifting comparative advantages.
*"Mr. Richardson was Jesse James", a play about the summer Jesse James may have spent in Princeton, Ontario.
London Fringe Festival
SHOW DATES AT THE PALACE THEATRE:
Wed June 1st: 6:30pm
Fri June 3rd: 8:00pm
Sun June 5th: 1:30pm
Tues June 7th: 9:30pm
Thurs June 9th: 6:30pm
Sat June 11th: 2:00pm
We recently had a meeting with the people who manage our pension funds. It was this meeting that spurred me to write this post.
I was told that if our portfolio earns 3.8% per year, we'll be in excellent shape. They went on to tell us that 3.8% seemed like a reasonable expectation for a conservative portfolio like ours.
First of all, I'm not convinced that 3.8% is a reasonable expectation. I'm not sure interest rates will go that high again for quite some time.
More important though is that if rates of return on very conservative portfolios do go up to 3.8%/yr, it will be because of inflation and inflationary expectations.
Interest rates are and have been low for the past few years because people don't expect much inflation. If and when inflationary expectations increase, then interest rates will rise: lenders will demand higher rates to compensate for the lost purchasing power of the money being repaid, and borrowers will be willing to pay higher rates because they want to borrow to buy now to beat expected price increases.
The impact of inflationary expectations on interest rates has been known for a long time. It was probably first made clear by Irving Fisher with the following equation. In words,
The nominal (or actual, stated) rate of interest = the expected rate of inflation plus the real rate of interest (which is what the nominal interest rate would be in the absence of any inflation):
iN = E(%ΔP) + iR
It looks as if the real rate of interest these days is somewhere between 1.5% and 2%, meaning that a rate of return of 3.8% would be consistent with an expected rate of inflation around 1.5-2% as well.
If so, then to say we'll be okay must also take into account the rate of inflation. To say our monthly withdrawals of $X will last Y years at 3.8% without accounting for inflation would be a mistake.
Either expected inflation must be used to adjust the $X withdrawals, or the calculations should use a lower rate of return, more in keeping with the expected real interest rate, say down around 2%/yr.
I'm old enough to have experienced major paradigm shifts in many areas. And so I wonder, which theoretical models make predictions most in line with future events?
Climate Change Models?
And for each model, there have been people who claim "It's settled science!"
Authoritarianism, always latent in progressivism, is becoming explicit. Progressivism’s determination to regulate thought by regulating speech is apparent in the campaign by 16 states’ attorneys general and those of the District of Columbia and the Virgin Islands, none Republican, to criminalize skepticism about the supposedly “settled” conclusions of climate science. ...
“The debate is settled,” says Obama. “Climate change is a fact.” Indeed. The epithet “climate change deniers,” obviously coined to stigmatize skeptics as akin to Holocaust deniers, is designed to obscure something obvious: Of course the climate is changing; it never is not changing — neither before nor after theMedieval Warm Period (end of the 9th century to the 13th century) and the Little Ice Age (1640s to 1690s), neither of which was caused by fossil fuels. ...
And of course, it's all for own good.
Fair-use of someone's published works means that it's okay to quote sections for review or research purposes. It does not mean it is okay to copy their works holus bolus.
My experience with Google Books and with Amazon has always been that that is precisely what they provide. In other words, they were making snippets or brief sections available for review or research purposes.
Finally, today the U.S. Supreme Court confirmed this finding (from WaPo):
When the case reached the U.S. Court of Appeals for the 2nd Circuit last year, a panel of three judges sided with Google -- finding that the tech giant's efforts amounted to a "transformative" use of the material and that snippets from searching the database don't amount to a "substantial substitute" for an original book.
I generally like plastic bags for many uses, and I have written about them before.
But it disturbs me that so many people are so careless and/or thoughtless about using and disposing of plastic bags.
Today Ms Eclectic and I walked down to listen to the birds along the river and had a delightful stroll. One jarring note, though, was all the plastic bags that had been trapped by the weeds and bushes as the river subsided after its spring highs:
Quoted from the Elder of Ziyon [EE: emphasis added]:
Khaled Abu Toameh: Palestinians: Erasing Christian HistoryFor Palestinian Christians, the destruction of the ancient Byzantine church ruins is yet a further attempt by Palestinian Muslim leaders to efface both Christian history and signs of any Christian presence in the West Bank and Gaza, under the Palestinian Authority (PA) and Hamas. A growing number of Christians feel they are being systematically targeted by both the PA and Hamas for being Christians.
Bulldozers were used to destroy some of the church artifacts; some Palestinian Christians accused both Hamas and the PA of copying ISIS tactics to demolish historic sites.
"Where are the heads of the churches in Jerusalem and the world?... Where are the Vatican and UNESCO? Where are the leaders and politicians who talk, talk, talk about national unity and the preservation of holy sites? Or is this a collective conspiracy to end our existence and history in the East?" — Sami Khalil, a Christian from the West Bank city of Nablus.
The plight of Palestinian Christians does not interest the international community. That is because Israel cannot be blamed for demolishing the antiquities. If the current policy against Christians persists, the day will come when no Christians will be left in Bethlehem.
Everyone thinks I'm upset because it snowed here again today.
I'm upset because the forecast says it's going to rain tonight and my latest snow stomp art will be washed away soon.
Links to most of my previous snow-stomp art (in reverse chronological order):
Special Weather Statement (this post)
Yesterday Jack sent me this piece. Everyone who holds up Scandinavian countries as some sort of big-gubmnt ideal needs to think about these points.
I have written before that if you care about the potentially poor of the future as well as the poor of today, you tend to favour economic policies that promote economic growth. As Tyler Cowen once opined, "Economic growth is the best anti-poverty programme there is."
There is a long-standing story in Princeton, Ontario (yes, there is such a town), that after the failed Northfield Minnesota bank robbery, Jesse James found his way to Princeton, Ontario.
Jason Rip has written a play about what might have happened while he was there, "Mr. Richardson Was Jesse James."
The play will be performed as one of the productions during the 2016 London Fringe Festival.
At the Palace Theatre:
Wed June 1 6:30
Fri June 3 8:00
Sun June 5 1:30
Tues June 7 9:30
Thurs June 9 6:30
Sat June 11 2:00
It stars Rob Faust and Chris McAuley, along with Sarah Abbott and Matthew Stewart. Also I'm in it (a small role).
There are LOTS of plays to see during the Fringe Festival, but this one will be worth seeing.
I woke up to see snow on the ground this morning! Yea!!!!! More opportunities for snow-stomp art!
This one was far less complex than my previous work (Qubix) but somehow seemed appropriate:
Rum! Palms! A hammock! No wonder it also looks like a stylized happy face!
Links to most of my previous snow-stomp art:
My granddaughter and I are going to see Titus Andronicus tomorrow evening at The Arts Project in London. If I didn't know the producer/director, and if I didn't know and respect the actors playing the leading roles, and if I didn't enjoy supporting local theatre, I probably wouldn't go to see this play.
Murder, rape, dismemberment, mutilation, torture, fratricide, sacrificial death -- you name it. This play has all that gruesome stuff. I'm not keen on it. From Wikipaedia,
In his 1998 book, Shakespeare: The Invention of the Human, Harold Bloom attacked the play on numerous occasions, calling it "a howler", "a poetic atrocity", "an exploitative parody, with the inner purpose of destroying the ghost of Christopher Marlowe" and "a blowup, an explosion of rancid irony." Bloom summates his views by declaring "I can concede no intrinsic value to Titus Andronicus." Citing the 1955 Royal Shakespeare Company (RSC) production, directed by Peter Brook and starring Laurence Olivier, which is generally agreed to have provided the impetus for the 20th century revaluation of the play, Bloom said that the audience laughed several times in scenes which were supposed to be tragic, and he sees this as evidence for its failure as Tragedy. He particularly focuses his criticism on the line when Lavinia is told to carry Titus' severed hand in her mouth (3.1.281), arguing that no play which contains such a scene could possibly be serious. He thus concludes the best director to tackle the play would be Mel Brooks.
Say, now there's an idea! I'm going to laugh all the way through the play. Maybe I'll have a few glasses of wine before I go, too.
If not prepared properly, red kidney beans (and many other members of the lentil family) can cause food poisoning. Or at least might contain some toxins. [via Jack]
Causes of red kidney bean poisoning
Symptoms of red kidney bean poisoning
I was so excited by the snow we had last night, I had trouble sleeping! I wanted to get out on the lawn this morning to try my latest snow-stomp art idea.
If I'd walk straighter, it would look better, but I'm pretty happy with it anyway.
By mid-afternoon, there had been some melting and the sun was shining. The contrast made the patterns much more striking:
Previous examples of my snow stomp art:
I have no idea how reliable this source is, but I love the examples posted there, most likely as humour submissions.
My own three stupid stories from interviews. They're nowhere near as funny as the ones in the link though.
Unfortunately the great, brief questions and answers at the Buzzfeed site are screen captures from tweets, so you'll have to follow the link to see them. Believe me, it's worth it. They're funny.
Former student, Gerry Nicholls, is very witty. I've enjoyed reading things he writes for years. Here's a brilliant example. The conclusion:
Sure, I get the concept in theory: government-subsidized companies will invent something amazingly innovative and environmentally friendly, such as machines that run on the warmth generated by Trudeau’s “Sunny ways”.
Yet, the sad truth of economics is that companies which rely on government handouts are usually only good at innovating one thing: new ways to get government hand outs. [emphasis added]
So you see, for all our sakes we better hope the climate change alarmists are wrong or else we’ve had it.
It’s not that I’m not a “climate change denier” so much as I’m a “government competence denier.”
Too bad Gerry hasn't learned that the correct spelling is "gubmnt".
I have a strong sense that many of my pro-Palestinian friends use lots of arguments to be anti-Israel, but in reality they just don't think Israel has the right to exist. I wonder if these people would feel the same way if the Arab countries had accepted the 1947 borders and not attacked Israel.
But things like this continue to appall me. A Belgian crisis-line worker denies that Israel exists:
At least two Israelis were injured in the terror attacks in Brussels. Israel would like to fly them home and so in order to release them from the hospital, a Jewish volunteer called up the Crisis Center set up by the Ministry for Internal Affairs to ask about the procedure.
He was told that the Israeli victims could not be sent back to Israel, they can only be sent back to Palestine....
JTA adds:Michael Freilich, the editor-in-chief of Joods Actueel, said it “defies imagination” that a Belgian state employee would display the anti-Israel behavior that is commonplace in Arab countries. He also called for punishing the operator instead of issuing the “standard apology.”
The recording’s release follows at least four recorded cases in which people who either spoke Arabic or wore Muslim traditional garb, destroyed, concealed or removed Israeli flags at an impromptu memorial space set up for the attacks’victims at Place de la Bourse in Brussels. It features many flags, including of Arab countries and the Palestinian Authority.
UPDATE: The Crisis Center apologized and says it fired the employee.
Former student David Henderson makes this point clearly in a recent post at EconLog. He points out that many of the people in the top 1% are professionals whose positions are protected by laws that restrict entry and keep out the competition. Quoting Jonathan Rothwell, he notes,
For lawyers, doctors, and dentists-- three of the most over-represented occupations in the top 1 percent--state-level lobbying from professional associations has blocked efforts to expand the supply of qualified workers who could do many of the "professional" job tasks for less pay....
Proportion of lawyers in the top 1 percent? 15 percent....[EE: Shakespeare comes to mind]...
Proportion of physicians and surgeons in the top 1 percent? 31 percent. ...
Proportion of dentists in the top 1 percent? 21 percent.
Please check either David's post or Rothwell's paper for explanation and details.
I might be tempted to add tenured university professors to the group. I know tenure isn't explicitly a statutory provision, but it has similar effects. I hope David will consider including them/us in his forthcoming research.
Interestingly, it isn't raw, nasty, big-corporation monopoly that David is talking about; it's monopolies created by gubmnt, particularly barriers to competition in the professions.
As Harold Demsetz once wrote many years ago [paraphrased from memory], "the major cause of monopoly is government."
Professors at Columbia University have taken sides, with some pro-BDS [Boycott, Divestment, Sanctions] and other anti-BDS.
The Elder of Ziyon has an interesting take on the split:
Of the 69 Columbia professors who signed a pro-BDS petition. 15 of them work in the anthropology department, six in philosophy, 13 in Middle East studies, two in Gender & Sexuality Studies, four in art history, six in history and eight in English, and only one in law.
The pro-Israel petition, on the other hand, has 26 signatures from the College of Physicians and Surgeons, 75 from the Columbia Medical Center, 27 from the Law School, and many others in the engineering and other medical fields.
In other words, the professors who support Israel are overwhelmingly specialists in fields where the truth often means the difference between life and death, and the ones who are anti-Israel largely do their work in fields where truth is a quaint and elastic concept.
This explains a lot.
Don Boudreaux says it so well in his "Bonus Quotation of the Day [March 22]" from a passage by Paul Krugman and in his rhetorical questions that follow that:
… from page 220 of the 2005 7th edition of Paul Krugman’s and Maurice Obstfeld’s excellent textbook, International Economics: Theory & Policy:
[I]t’s hard to make sense of actual trade policy if you assume that governments are genuinely trying to maximize national welfare. On the other hand, actual trade policy does make sense if you assume that special-interest groups can buy influence.Because special-interest groups – cronies – play a significant role in setting and fashioning the details of trade “policy,” shouldn’t we assume that they also play a significant role in setting and fashioning the details of all other policies? Why are the same politicians who sell out the public welfare when drafting, negotiating over, and voting on trade policy to be trusted to defend the public welfare when, say, drafting, negotiating over, and voting on labor legislation, health-care legislation, immigration policies, tax policies, or foreign policies? Or campaign-finance ‘reforms’?