There are 89 comments.

1. Member
   Majestyk

   @Majestyk

   10:10 AM EDT ⋅ May 29, 2015

   viruscop:

   When I took graduate microeconomics (my textbook was microeconomic theory by Mas-Colell, Whinston, and Green), a mathematical reason is giving for the effectiveness of redistribution from one person to another (given certain assumptions, of course).

   There is no conceivable mathematical justification for this twaddle.

   If there were, their argument should be then that we can just spend ourselves rich!  Why don’t we put everybody on Food Stamps then in order to stimulate economic growth?

2. Member
   Miffed White Male

   @MiffedWhiteMale

   

   10:24 AM EDT ⋅ May 29, 2015

   Majestyk:

   viruscop:

   When I took graduate microeconomics (my textbook was microeconomic theory by Mas-Colell, Whinston, and Green), a mathematical reason is giving for the effectiveness of redistribution from one person to another (given certain assumptions, of course).

   There is no conceivable mathematical justification for this twaddle.

   If there were, their argument should be then that we can just spend ourselves rich! Why don’t we put everybody on Food Stamps then in order to stimulate economic growth?

   that’s what I love about “the multiplier effect”, where supposedly every dollar of government spending (excuse me, “investment”) generates $1.47 of economic activity, or some such twaddle.

   If true, we should implement a 100% tax rate and have the government pa for everything.

3. Inactive
   viruscop

   @Viruscop

   11:29 AM EDT ⋅ May 29, 2015

   Majestyk:

   viruscop:

   When I took graduate microeconomics (my textbook was microeconomic theory by Mas-Colell, Whinston, and Green), a mathematical reason is giving for the effectiveness of redistribution from one person to another (given certain assumptions, of course).

   There is no conceivable mathematical justification for this twaddle.

   If there were, their argument should be then that we can just spend ourselves rich! Why don’t we put everybody on Food Stamps then in order to stimulate economic growth?

   I found the relevant theorem online. The theorem that basically justifies welfare is the second fundamental theorem of welfare economics. The formal statement of it is there in the proof, though it lacks the formal notation. Note also the assumptions that need to be justified for the theorem to hold.

4. Contributor
   Peter Robinson

   @PeterRobinson

   11:49 AM EDT ⋅ May 29, 2015

   1967mustangman:

   Peter Robinson:

   1967mustangman:Peter,

   Pics or it didn’t happen. We want pictures of you in your grubbies.

   P.S. Grease is really hard to get out of a sweater………you have been warned!

   You’re talking about my futzing around with my new (but old) beemer, right mustangman? Below a couple of pics. The car’s a 2002 M3. The old guy’s me. The young guy’s my oldest boy. We drove the car up through the coastal mountains and then down to the beach one afternoon, purely for the delightful heck of it. (Sorry. No sweaters needed that day.)

   

   

   Very nice Peter. Very nice.

   When do we see pics of your ’67 Stang?

5. Contributor
   Peter Robinson

   @PeterRobinson

   11:51 AM EDT ⋅ May 29, 2015

   Cogito Ergo BBQ:Peter, congrats on the beemer.It is flat out gorgeous. As a previous bmw owner, I canattest that nothing else drives like a German sports car. Unfortunately, I had to sell my old bmw 325i. The old, leaky rag top worked fine in the high deserts of eastern Oregon, but was simply not up to the torrential rains of south eastern Arkansas, where I presently reside. So now I’m a truck man, but oh how I miss that old beemer.

   It’s an old car, but, man, is it ever fun.

6. Inactive
   Vance Richards

   @VanceRichards

   11:55 AM EDT ⋅ May 29, 2015

   Peter Robinson:

   1967mustangman:

   Peter Robinson:

   1967mustangman:Peter,

   Pics or it didn’t happen. We want pictures of you in your grubbies.

   P.S. Grease is really hard to get out of a sweater………you have been warned!

   You’re talking about my futzing around with my new (but old) beemer, right mustangman? Below a couple of pics. The car’s a 2002 M3. The old guy’s me. The young guy’s my oldest boy. We drove the car up through the coastal mountains and then down to the beach one afternoon, purely for the delightful heck of it. (Sorry. No sweaters needed that day.)

   

   

   Very nice Peter. Very nice.

   When do we see pics of your ’67 Stang?

   Nice car, beautiful location, but did you take those pictures with a 1970’s Polaroid?

7. Member
   Ricochet

   @JudgeMental

   12:00 PM EDT ⋅ May 29, 2015

   Vance Richards:

   Peter Robinson:

   1967mustangman:

   Peter Robinson:

   1967mustangman:Peter,

   Pics or it didn’t happen. We want pictures of you in your grubbies.

   P.S. Grease is really hard to get out of a sweater………you have been warned!

   You’re talking about my futzing around with my new (but old) beemer, right mustangman? Below a couple of pics. The car’s a 2002 M3. The old guy’s me. The young guy’s my oldest boy. We drove the car up through the coastal mountains and then down to the beach one afternoon, purely for the delightful heck of it. (Sorry. No sweaters needed that day.)

   

   

   Very nice Peter. Very nice.

   When do we see pics of your ’67 Stang?

   Nice car, beautiful location, but did you take those pictures with a 1970′s Polaroid?

   West coast… he specified an afternoon drive.  I would suspect sun overload from it being mostly in front of the camera.

8. Member
   Majestyk

   @Majestyk

   12:06 PM EDT ⋅ May 29, 2015

   viruscop:

   Majestyk:

   There is no conceivable mathematical justification for this twaddle.

   If there were, their argument should be then that we can just spend ourselves rich! Why don’t we put everybody on Food Stamps then in order to stimulate economic growth?

   I found the relevant theorem online. The theorem that basically justifies welfare is the second fundamental theorem of welfare economics. The formal statement of it is there in the proof, though it lacks the formal notation. Note also the assumptions that need to be justified for the theorem to hold.

   Perhaps I should have said “mathematically, socially and scientifically credible.”

   Also, if I’m reading this correctly there is no positive multiplier effect – it simply states that you can’t make somebody better off without making somebody worse off – which is apparent from Pareto.  The implication is that at a given moment in time there is a zero-sum nature to economics because you cannot consume what you have not first produced.  That doesn’t mean that you can’t grow the output of the economy in the future, thereby changing the variables, but again, you can’t divide what hasn’t been produced, and producers respond to incentives – so the only way to ensure that there will be more product in the future is for entrepreneurs to form capital and invest in the hope of creating positive returns.

   So – there’s no multiplier effect.  In fact, as was pointed out, it’s solely negative because of inefficiencies.

9. Inactive
   viruscop

   @Viruscop

   12:13 PM EDT ⋅ May 29, 2015

   Majestyk:

   viruscop:

   Majestyk:

   The formal multiplier effect is a result from macroeconomics. The theorem just shows that utility can be maximized by redistributing from some people to others, in the form of lump sums; the theorem is necessary as a building block to justify redistributing, and then the multiplier effect gives a degree to just how beneficial that distribution can be (sort of).

   The page gives a good explanation of the second theorem:

   The second theorem states that out of all possible Pareto-efficient outcomes, one can achieve any particular one by enacting a lump-sum wealth redistribution and then letting the market take over. This appears to make the case that intervention has a legitimate place in policy – redistributions can allow us to select from all efficient outcomes for one that has other desired features, such as distributional equity. The shortcoming is that for the theorem to hold, the transfers have to be lump-sum and the government needs to have perfect information on individual consumers’ tastes as well as the production possibilities of firms. An additional mathematical condition is that preferences and production technologies have to be convex.[2]

10. Member
    Majestyk

    @Majestyk

    12:16 PM EDT ⋅ May 29, 2015

    viruscop:

    Majestyk:

    viruscop:

    Majestyk:

    The formal multiplier effect is a result from macroeconomics. The theorem just shows that utility can be maximized by redistributing from some people to others, in the form of lump sums; the theorem is necessary as a building block to justify redistributing, and then the multiplier effect gives a degree to just how beneficial that distribution can be (sort of).

    The page gives a good explanation of the second theorem:

    The assumption cannot hold because the government doesn’t possess perfect information any more than the market does, but the market’s information is more likely to be closer to perfect than the government’s precisely because the market reacting to stimuli rather than setting policy based upon what it would like to see.

    EDIT: I should also point out that the field of macroeconomics is quite woolly.  Macroeconomists of all stripes have failed to correctly predict how the economy would react to various stimuli.  The economy is far too complex to model correctly, just as the climate is.

11. Member
    Miffed White Male

    @MiffedWhiteMale

    

    12:18 PM EDT ⋅ May 29, 2015

    viruscop:

    The shortcoming is that for the theorem to hold, … the government needs to have perfect information on individual consumers’ tastes as well as the production possibilities of firms.

    That’s not a “shortcoming”, that’s a sucking chest wound and a severed carotid.

12. Inactive
    viruscop

    @Viruscop

    12:27 PM EDT ⋅ May 29, 2015

    Majestyk:

    viruscop:

    Majestyk:

    viruscop:

    Majestyk:

    The formal multiplier effect is a result from macroeconomics. The theorem just shows that utility can be maximized by redistributing from some people to others, in the form of lump sums; the theorem is necessary as a building block to justify redistributing, and then the multiplier effect gives a degree to just how beneficial that distribution can be (sort of).

    The page gives a good explanation of the second theorem:

    The assumption cannot hold because the government doesn’t possess perfect information any more than the market does, but the market’s information is more likely to be closer to perfect than the government’s precisely because the market reacting to stimuli rather than setting policy based upon what it would like to see.

    Not necessarily. The market could have imperfections that the government could not. For example, some market could be creating an externality, and this externality can persist without government intervention. Some players in the market could have more information than other players have, causing goods to be sold at our below a price of perfect competition in a market that is thought to be perfectly competitive. These inefficiencies might be known to exist by the government, even if the government does not have perfect information in all areas of the market, but it does have perfect information in these small areas. So the government can correct for this by something that is effectively a lump transfer of payments.

13. Inactive
    viruscop

    @Viruscop

    12:29 PM EDT ⋅ May 29, 2015

    Note that we started talking about China and the US and have come back to economics. Whenever I talk about anything on this site, it comes back to economics. We have never touched on the social issues. That is because economics (and by extension foreign policy) is truly important to the fate of the country, and the social issues just aren’t that important to the well-being and fate of the US.

14. Member
    Ricochet

    @JudgeMental

    12:39 PM EDT ⋅ May 29, 2015

    viruscop:

    Majestyk:

    viruscop:

    Majestyk:

    viruscop:

    Majestyk:

    The formal multiplier effect is a result from macroeconomics. The theorem just shows that utility can be maximized by redistributing from some people to others, in the form of lump sums; the theorem is necessary as a building block to justify redistributing, and then the multiplier effect gives a degree to just how beneficial that distribution can be (sort of).

    The page gives a good explanation of the second theorem:

    The assumption cannot hold because the government doesn’t possess perfect information any more than the market does, but the market’s information is more likely to be closer to perfect than the government’s precisely because the market reacting to stimuli rather than setting policy based upon what it would like to see.

    Not necessarily. The market could have imperfections that the government could not. For example, some market could be creating an externality, and this externality can persist without government intervention. Some players in the market could have more information than other players have, causing goods to be sold at our below a price of perfect competition in a market that is thought to be perfectly competitive. These inefficiencies might be known to exist by the government, even if the government does not have perfect information in all areas of the market, but it does have perfect information in these small areas. So the government can correct for this by something that is effectively a lump transfer of payments.

    That would require giving the government the power to do these lump sum transfers at will, at any time, based on their perceived perfect information of the moment.  That’s not how our government works.  In our system the law is written this year, voted on next year, implemented two years after that and then runs in  perpetuity.  That doesn’t really allow for the sort of perfect information required.

    Or you have to be ready to trust whoever is currently in power and whomever may follow with the kind of broad power I described.  Also not likely in our system.

15. Inactive
    viruscop

    @Viruscop

    12:48 PM EDT ⋅ May 29, 2015

    Creepy Lurker:

    viruscop:

    Majestyk:

    viruscop:

    Majestyk:

    viruscop:

    Majestyk:

    A lot of these things are automatic transfers. The food stamps are paid out in a lump sum when someone applies. The same goes for unemployment benefits, and there is a separate mechanism for Social Security. So we don’t need new, constant legislation all the time to pay out the transfers. The mechanisms already exist to pay them out, and the money is redistributed through taxes. Why it is redistributed from the rich to the poor is another issue.

16. Member
    Ricochet

    @JudgeMental

    12:56 PM EDT ⋅ May 29, 2015

    viruscop:

    Creepy Lurker:

    viruscop:

    Majestyk:

    viruscop:

    Majestyk:

    viruscop:

    Majestyk:

    A lot of these things are automatic transfers. The food stamps are paid out in a lump sum when someone applies. The same goes for unemployment benefits, and there is a separate mechanism for Social Security. So we don’t need new, constant legislation all the time to pay out the transfers. The mechanisms already exist to pay them out, and the money is redistributed through taxes. Why it is redistributed from the rich to the poor is another issue.

    I was addressing your specific comments…

    These inefficiencies might be known to exist by the government, even if the government does not have perfect information in all areas of the market, but it does have perfect information in these small areas.

    And I think you also missed part of my point… that the programs we do have actually do harm, as well as good.  A substantial degree of harm.

17. Inactive
    user_473455

    @BenjaminGlaser

    5:11 PM EDT ⋅ May 29, 2015

    I am really glad I served in the USMC on active duty.

    As I look back now I really wish I would have made a career out of it.

    I had a chance to get a into a commissioning program, but made a different choice.

    Also as a “Rush Baby” whose parents were converted by Mr. Limbaugh’s commentary while I was ~11 years old he had a inestimable effect on my life.

18. Contributor
    Peter Robinson

    @PeterRobinson

    5:46 PM EDT ⋅ May 29, 2015

    Cogito Ergo BBQ:Peter, congrats on the beemer.It is flat out gorgeous. As a previous bmw owner, I canattest that nothing else drives like a German sports car. Unfortunately, I had to sell my old bmw 325i. The old, leaky rag top worked fine in the high deserts of eastern Oregon, but was simply not up to the torrential rains of south eastern Arkansas, where I presently reside. So now I’m a truck man, but oh how I miss that old beemer.

    Thanks, Cogito. The car has just over 100K miles on it, and in the past year I’ve driven it a grand total of…under 5K miles. It’s so much fun that I figure I’ll keep it more or less forever–although there’ll be a bad moment when the roof starts to leak. On the other hand, isn’t that why God gave us duct tape? (We don’t get as much rain here in California as you do down in Arkansas.)

19. Inactive
    Jason Rudert

    @JasonRudert

    8:26 PM EDT ⋅ May 29, 2015

    Got to the part about joining the military. Then it cut out.
    But man, this thing needed more killer less filler.
    Lightning round? Wha?

20. Member
    Miffed White Male

    @MiffedWhiteMale

    

    9:24 PM EDT ⋅ May 29, 2015

    Peter Robinson:

    Thanks, Cogito. The car has just over 100K miles on it, and in the past year I’ve driven it a grand total of…under 5K miles. It’s so much fun that I figure I’ll keep it more or less forever–although there’ll be a bad moment when the roof starts to leak.

    Careful with thoughts like that Peter.  I have a 1987 Toyota MR2 two-seater that I am the original owner of.  226K on it.  It’s so much fun that I too figure I’ll keep it more or less forever – which is how I convinced myself to spend an obscene amount of money rebuilding the engine a few years back.

    And it needs some body work to clean up some rust…

21. Inactive
    user_144170

    @MattCarriere

    1:41 AM EDT ⋅ May 30, 2015

    I am 31 years old. I suppose by some measures I am on the upper edge of being a Millennial. I do share many of their habits when it comes to consuming media, however. For example, the last time I watched a live broadcast was in November when my Calgary Stampeders romped to a Grey Cup victory. Everything else I watch (including NHL hockey) is recorded.

    BUT! I have been listening to Rush Limbaugh for five years, and Glenn Beck for four. As you may have divined, I live in Canada and could not listen to a radio broadcast of either of those shows even if I wanted to.

    As you say, podcasts are the future, and Rush is already there, giving succor to a deep-blue Tory in the newly-minted People’s Republic of Alberta.

22. Inactive
    Mr. Dart

    @MrDart

    8:15 AM EDT ⋅ May 30, 2015

    Among BMW enthusiasts the cars are bimmers while the motorcycles are beemers. Among folks who don’t enjoy German cars like I do pointing this out confirms their opinion of we who own BMW’s and M-B’s.

23. Member
    RufusRJones

    @RufusRJones

    9:55 AM EDT ⋅ May 30, 2015

    Social Security, Medicare, and the vast majority of government pensions are actuarial disasters. Western central banks are at their limits goosing the crap out of their economies. GDP will never go up, because we will never get any decent leadership to deal with globalization and other demographic drags. They will never free up the economy enough to make it all work. Rent seeking and graft is the American Way, now. All Western bond markets will back up uncontrollably at some point. There is no chance of politicians guiding us out of this safely.

24. Coolidge
    user_1001260

    @FreschFisch

    10:04 AM EDT ⋅ May 30, 2015

    James on a king size bed?

25. Thatcher
    Cow Girl

    @CowGirl

    6:42 PM EDT ⋅ May 31, 2015

    Rush still rules. I listened to him live for about 5 years, then I went back to work full time. so the “DVR” of AM radio is a membership so one can listen on one’s own schedule. Same reason why I subscribe to Ricochet—convenience! Rush remains relevant because his trolls keep quoting ( or misquoting) him on the cable channels. Those of us who listen were attracted by hearing someone who could articulate our own thoughts and opinions so often and so well. It’s why I love Ricochet,too. Like minded, well spoken conversation!

26. Coolidge
    user_428379

    @AlSparks

    7:39 PM EDT ⋅ May 31, 2015

    I was surprised, during their discussion of Rush, and their comments on the decline of terrestrial radio, and the rise of podcasts, that they didn’t seem to realize that Rush does have podcasts.  Though, unlike Ricochet, he’s managed to keep his behind a paywall.  Of course we don’t know what his subscriber base is, but it’s probably substantial.

    Most of the bigger syndication sites that broadcast on radio have podcasts of some kind or other, and that includes the non-political podcasts.

    I listen a little (less and less) to selected ESPN podcasts as well as WFAN Sports radio (more and more; because they’re less political than ESPN and stick with sports).

    Radio stations are adapting, just like the television networks are (i.e. placing their content on Hulu Plus and related internet streaming services).

27. Inactive
    Klaatu

    @Klaatu

    4:47 PM EDT ⋅ Jun 3, 2015

    Peter,

    Welcome to the world of BMW lovers. I have a couple of old (1974 2002tii and 1978 320i) Bimmers in various states of disrepair in my garage. (I promise dear, they will run again.) I also drive a 328i coupe As my daily driver.

    You are fortunate to live in an area with a number of great BMW shops and tuners. There is a place in Hayward called Double 02 Salvage which is like a candy store for BMW owners. Also, the Golden Gate chapter of the BMW Car Club of America (BMWCCA) is one of the best in the nation. PM me if you are interested in joining, I would love to get the referral :-).

28. Contributor
    Peter Robinson

    @PeterRobinson

    10:28 PM EDT ⋅ Jun 3, 2015

    Mr. Dart:Among BMW enthusiasts the cars are bimmers while the motorcycles are beemers.Among folks who don’tenjoy German cars like I do pointing this out confirms their opinion of we who own BMW’s and M-B’s.

    I’d always wondered about that. From now on, “bimmer” it shall be.

29. Contributor
    Peter Robinson

    @PeterRobinson

    10:29 PM EDT ⋅ Jun 3, 2015

    Klaatu:Peter,

    Welcome to the world of BMW lovers.I have a couple of old (1974 2002tii and 1978 320i) Bimmers in various states of disrepair in my garage. (I promise dear, they will run again.)I also drive a 328i coupe As my daily driver.

    You are fortunate to live in an area with a number of great BMW shops and tuners.There is a place in Hayward called Double 02 Salvage which is like a candy store for BMW owners.Also, the Golden Gate chapter of the BMW Car Club of America (BMWCCA) is one of the best in the nation.PM me if you are interested in joining, I would love to get the referral :-).

    Too late, Klaatu, darn it: I already joined the Golden Gate chapter.  But you’re right. Somehow or other, bimmers just draw a man in.