The View from Right Field

Opportunity Cost: An Economics Principle for Life

I normally write about politics and current affairs, with an occasional post on more important things, like baseball.  This post is about another more important thing: opportunity cost.  Wow, you are probably saying, that sounds exciting.  Actually, it is – and it’s useful, too.

Tim Harford, “The Undercover Economist,” wrote about opportunity cost in the Financial Times on April 7.  (The FT has a paywall, but I’ll be able to link to the article on Mr. Harford’s website shortly.  I’ll put up a link when it is available. UPDATE (5/4/18 10:45 pm): Here is a link to the article.)

Opportunity cost is a pretty simple economic concept.  The idea is, for example, if you spend money on item A, you can’t spend it on item B.¹  Similarly, if you spend time doing one thing, you can’t spend the same time doing something else.  Time you spend on Facebook can’t be spent reading a book.  If you buy a car for $60,000, instead of one for $35,000, you have to skip the vacation you could have gone on for $25,000.

Cuba’s Ladies in White Win the Milton Friedman Prize for Advancing Liberty

Everybody has heard of the Nobel Peace Prize.  Over the years, it has honored people for doing great things.  Teddy Roosevelt in 1906 for negotiating the end of the Russo-Japanese War, George Marshall in 1953, Norman Borlaug in 1970 for the green revolution, and Lech Walesa in 1983. 

There have been deserving winners recently, too, such as Malala Yousafzai, a 15-year Pakistani girl, who won in 2014 after being shot in the head by the Taliban for going to school and writing about it, and Liu Xiaobo, a Chinese human rights activist, who won in 2010 but was not allowed to go to Oslo to collect the prize (surprise).  He also became just the second winner to die in custody.

Others, however, have been questionable, such as Kofi Annan and the United Nations in 2001.  (The people of Rwanda were not consulted.  See, inter alia, here and here.)  Three recent winners seem to have won mostly because they weren’t George W. Bush: Jimmy Carter in 2002,¹ Al Gore in 2007 (he should have won the presidential election in 2000), and Barack Obama in 2009 (George W. Bush was finally gone).  Also, the Organisation for the Prohibition of Chemical Weapons won in 2013.  We have seen how successful they have been.

A Government Program Doesn’t Seem to Work. Does Anybody Care?

The Wall Street Journal has an editorial today about the federal Job Corps program.  A new report by the Labor Department’s Inspector General apparently raises questions about whether the Job Corps is doing any good; i.e., whether it is really accomplishing what it is supposed to do.  The Journal editorial lists some of the failings the Inspector General’s report found.  My question here, though, is not whether the editorial, or the Inspector General, is right about how well the Job Corps is doing its job.  My question is: Does anybody care?

The Job Corps apparently costs $1.7 billion a year.  (That used to sound like real money.  Now it sounds like a rounding error.)  But other than the Inspector General’s report, is anybody checking to see if the program works?  I know that it has a good intention: helping people get training and skills – and jobs.  But are we checking to see if it is actually succeeding?

TDS: Trump Derangement Syndrome

We have previously had ODS and BDS (i.e., Obama Derangement Syndrome and Bush Derangement Syndrome [George W. Bush, that is]).  ODS and BDS can be explained as stressing out over President Obama or President Bush all the time, thinking that everything wrong was their fault, and worrying that the country might never recover.  We had a form of CDS (i.e., Clinton Derangement Syndrome) back in the nineties (particularly during Bill Clinton’s second term), even if it wasn’t called that.¹  There was probably a RRDS (i.e., Ronald Reagan Derangement Syndrome), though it, too, would not have had that name.  There definitely was a NDS (i.e., Nixon Derangement Syndrome), which started not in 1969 or 1973 (with Watergate), but in 1948.²  However, I don’t think any of them, even ODS, was as all-consuming as TDS (except maybe NDS during the last few months of Watergate).

TDS has been going full strength since Donald Trump was inaugurated – if not since he was elected (or before).³   It’s hard to read a newspaper or watch a news show (or check your smartphone, for those who get their news that way) without seeing all kinds of things about Donald Trump: good, bad, crazy, porn, etc.  And we have 33 months to go (at a minimum).

Don’t “Kill Quill”. It’s a Question of Following Proper Procedures.

The United States Supreme Court heard arguments yesterday in South Dakota v. Wayfair, a case involving the question of whether a state can require a retailer to collect its sales tax even if that retailer does not have a physical presence in the state.  The Supreme Court decided this issue 25 years ago in Quill Corp. v. North Dakota (there must be something about the Dakotas).  In Quill, the Court said a state cannot force a retailer to collect its sales tax without a physical presence in the state – unless if Congress allows it.  Under the Constitution, Congress can authorize such taxes, but since Congress hadn’t authorized them, states couldn’t collect them.

Several years ago, however, Justice Kennedy gave a hint that perhaps Quill should be revisited, so North Dakota’s neighbor to the south was in the Supreme Court yesterday.  With the case before the Supreme Court, there was an article in The Wall Street Journal about the problems small companies and individuals would have trying to collect and process sales taxes in all of the states.  And it’s not just states that have sales taxes.  Cities and counties have them, too, with different rates in each.  What about audits?  Can a small business handle dozens of audits, some of them thousands of miles away?  Should the size of the business matter?

The James Comey Interview and Hillary Clinton’s Campaign

There have been, and will continue to be, all kinds of comments on former FBI Director James Comey’s interview broadcast yesterday on “Sunday on ABC.”  What Mr. Comey said about Donald Trump.  What President Trump tweeted about Mr. Comey.  I will leave that to others.

What I wanted to comment on was what Mr. Comey said about the role politics played in his announcement in late October of 2016 that the FBI was reopening the investigation into Hillary Clinton’s emails.  According to the Los Angeles Times:

“During the interview, Comey acknowledged that at the time, he was convinced Clinton would win, and that belief probably influenced his decision to write the letters.

Instead of an Illinois "Brain Drain Tax," How About a Wall

Here is Scott Stantis’s cartoon in today’s Chicago Tribune on the “Illinois Exodus,” i.e., all the people leaving Illinois:

If the brain drain tax doesn’t work, here’s another idea: a wall.  Not like President Trump’s wall, however.  President Trump’s wall is designed to keep people out. 

Rather, a wall like the one they had in Berlin.  That was a wall to keep people in.  And think of all the jobs for people in the guard towers and in an Illinois Stasi, trying to figure out who might be trying to escape.

Social Trust

Megan McArdle wrote about trust, and in particular social trust, in a recent article on “The left’s Denmark envy.”  The reason for the left’s “Denmark envy” is fairly obvious: generous welfare benefits, social liberalism, and high taxes.  Plus Denmark doesn’t have the things those on the right predict for a country with generous benefits and high taxes, such as high unemployment, fleeing capital, lower GDP, and benefit cheating.  Why?  According to Ms. McArdle: “Denmark and its Nordic neighbors get away with it because they have an extraordinary high level of social trust.”

Ms. McArdle explains how social trust works and why the United States has less of it:

“‘Social trust’ is, well, what it sounds like: How much do you trust your neighbors?  And in turn, how trustworthy are they?  In a low-trust place such as Greece, people don’t trust their neighbors not to cheat, which in turn makes them more likely to cheat themselves, because why should you stay honest when everyone else is getting away with something?  This affects everything: whether people pay their taxes, whether they take benefits they don’t really need, how easy it is to regulate companies.  And social trust also works as a productivity booster, because [it allows you to] do away with a lot of the cumbersome monitoring that is ubiquitous in modern societies – the supervisors who oversee low-level workers, the store clerks who keep an eye on the customers.  Every worker who is not making sure that people don’t steal or shirk can be re-employed doing something that actually increases output.

@realDonaldTrump’s Tweets About Syria Are Appalling and Irresponsible

It is hard to comprehend how bad President Trump’s recent tweets about Syria have been.  First, though, let’s go through the sequence.

April 8:

“Many dead, including women and children, in mindless CHEMICAL attack in Syria. Area of atrocity is in lockdown and encircled by Syrian Army, making it completely inaccessible to outside world. President Putin, Russia and Iran are responsible for backing Animal Assad. Big price...

…to pay. Open area immediately for medical help and verification. Another humanitarian disaster for no reason whatsoever. SICK!”

Paul Ryan Is Retiring

This is truly sad.  Paul Ryan was one of the most principled and thoughtful members of Congress.  Instead of tweets and unrealistic positions, he actually tried to make a difference.  He pushed for programs to actually help people who needed help.  For him, being in Congress wasn’t all about getting re-elected. 

In 2008, he proposed “The Roadmap for America’s Future,” which was a plan to increase economic growth by reforming the tax code and Medicare and Social Security.  When he became chairman of the House Budget Committee, he wrote “The Path to Prosperity.”  While most politicians seem to focus on looking good, Paul Ryan wanted to do good.