Monday, September 12, 2005
- Via The Elder, I read this article in the Wall Street Journal (subscribers only) in which "experts" are saying we should raise gas taxes now, that the time is right. And why? "To diminish thirst" for petroleum products. Why? I have a great thirst for single-malt scotch, but its price helps to deter me from drinking it with meals. It's savored on special occasions. So why doesn't this work for gas?
Walter McManus, a University of Michigan automotive economist, estimates that if prices jumped to $2.86 a gallon and stayed at that level, sport-utility vehicle sales would fall 18% in five years. If gasoline rose to $3.37 a gallon, SUV sales would fall 28%. Sales of pickups and vans would plunge. "If you want people to economize fuel, increasing the cost through taxes would be effective," Mr. McManus says.But why do you want them to economize? It seems to me that this is a backdoor attempt to create a tariff wall against OPEC and particularly against Saudi Arabia and its extremist Islamic funding. You want to do that? Do it directly, as a matter of foreign policy. People seem to know that we have too many SUVs and vans. Ask them how they know that.
- You should read Arnold Kling today. He scorns Brad DeLong for arguing that what we need is a bigger FEMA to deal with hurricanes, with better leaders. While Intelligent Design is a crappy theory for the origin of the world, it appears liberals think ID works in creating better government bureaucracy.
The Department of Homeland Security appeals to those of the Intelligent Design faith. It was created under the theory that the reason that government failed to prevent the 9/11 attacks was that it was not centralized enough. What we needed was a larger organization, with more missions and less ability to focus. As a hard-core Intelligent Design believer, DeLong believes that DHS could be effective with the right administrators. To skeptics (including many of its employees), DHS is a clusterf*** no matter whom you put in charge.A colleague of mine has just left the private sector to work at DHS. I wish him luck. They'll get a great economist, but I doubt they'll make better decisions.
- Peter Gordon worries about how disasters lead to governments thinking they know better than markets. This example is precious.
In the same NY Times, Maureen Dowd writes: "Stuff happens. And when you combine limited government with incompetent government, lethal stuff happens." She and many other seemingly toilet trained adults believe that less limited but competent government is an option.Or as one of the categories at Cafe Hayek puts it, "reality is not optional." This was the point with my post last week on how much you expect government to be able to do. To argue, as one commenter did, that if we only had better government is simply a variation of the DeLong argument. (And DeLong did work in the first Clinton Administration, so contra Kling, DeLong probably feels he is in a position to judge. But that's not relevant.)
The economic way of thinking shows how social processes that look like recipes for chaos (and that have often been so described) produce actual cooperation and advance the purposes of those who participate in these processes. Adam Smith invoked a semi-theological metaphor to characterize this process: the invisible hand. Because economic theory explains the working of the invisible hand, it is in a very basic sense a defense of market systems.
Do DeLong, Dowd and McManus think the problems of energy and disaster response are engineering problems? For they are not. They are the description of millions of individual interactions. How much of what you know about each of these interactions is wrong? Probably a great deal. And the number of "smart people" you put in a room called FEMA or FEMMA or whatever isn't going to help. (And firing Brownie isn't going to change things, either.)