What I’m Reading: September 19th, 2016

  • (1) The British Labour Party is set to vote for party leadership on September 24th. Jeremy Corbyn looks likely to be reelected to the top spot, despite disastrously poor poll numbers outside his young, radical base of grassroots supporters, many new to the party and drawn in by Corbyn’s unapologetic far-left socialist views. For those not following U.K. politics, the Corbyn phenomenon in the U.K. Labour Party looks a lot like the rise the recent raise of Bernie Sanders in the U.S.—Corbyn/Labour is just characterized by a substantially more Maoist further Left public platform (I pressume Corbyn & Sanders are cut from same cloth on core policy positions and world views), substantially less public popularity relative to Sanders, less focus on domestic economic policy,  a substantially less charismatic front man (which is remarkable given the very lowbar Sander provides—call it a swag deficit or swagless Rachel to the bottom), a much more intense inter-party fight for control (perhaps irreconcible—see the chart from The Economist on voter response to a party schizism). From The Guardian,  5 potential and likely post-leadership-race outcomes are detailed here. UK Socialist columnist, Owen Jones, is extremely Pro-Corbyn—he details the basis of his support and what Corybyn’s second term in the Labour “captain’s chairs” could and should achieve, in Owen’s view. I tend to disagree with Owen here and am more inclined to agree with The Economist’s view. That view is excerpted below, along an abundance of charts on the Labour race and U.K. politics broadly. Consider new PM Theresa May’s polling relative Corbyn, via Huffington Post UK, with chart excerpts below: “Just 18% of those polled said Corbyn was ‘good in a crisis’, meaning he has fallen five points since the question was asked last year. May notched up the support of 52% of people…..Only in 1998, when William Hague was elected Tory leader a year into Tony Blair’s premiership, was a bigger rift seen—when Labour enjoyed a 25-point lead.”

  • (4) A good friend of my brother (and now me through him) has launched an interesting new publication on the concept of risk, focusing in on the financial markets and economic context. Chris Timmeman points to these two posts as representstiv samples of Risk, published out of Europe: “Helicopter Money” and “The Post Brexit Future of the UK Economy and the City.” Chris offered the following quote as an introduction to the publication:

    “Risk Blog, a publication of Risk Financial Study Association, is a student ran blog from the University of Groningen in the Netherlands. The blog features articles about economics, financial markets, banking as well as interviews with professors and professionals alike. Readers will enjoy short to medium length articles on topics they may or may not already know about, but from a European students’ perspective.”

  • (5) I’m pleased to learn that Tim Harford, profile economics writer and author of the outstanding Undercover Economist, has a podcast he’s producing for the the BBC titled More or Less: Behind the Stats. Though it’s a tad late in the wedding season for the utilitarianism of many, his podcast this week provides interesting economic insight into the socially optimum value of a wedding gift. The episode is also a great introduction to his format of his work. 
  • (6) Free market health care guru Avik Roy has announced the formation of a new think tank, going by the moniker, The Foundation for Research on Equal Opportunity (FREOPP). The institution will focus on “expanding economic opportunity to those who least have it by deploying the nation’s leading scholars and the tools of individual liberty, free enterprise, and technological innovation to serve this mission.” The center is launching with the publication of Transcending Obamacare, which is a much needed impressive treatise on options for productive health care reform in America. Not only do I have the highest regard for Avik Roy, but the center’s Board of Advisors, which is described in the press release at the institution’s “brain trust,” is indeed a brain trust for the larger free market movement and American public policy more generally. You’d be hard pressed to to assemble a team I have more respect for. I view this as extremely exciting news and look forward to their work.

  • (7) Three notable quotes on international trade policy:
    • (A) The Cato Institute’s International Trade Policy shop has spent the last 9 month going through, quite literally, every page of the voluminous TPP negiotiated agreement, which has yet to receive an up or down vote from Congress. They’ve published a section-by-section overview of the contents of the agreement and offered each chapter a 1-10 rank as “liberalizing” or advancing protectionism. Top line results quoted from the paper’s abstract:

    • “This paper presents a chapter-by-chapter analysis of the Trans-Pacific Partnership agreement from a free trader’s perspective. Brief summaries, assessments, scores on a scale of 0 (protectionist) to 10 (freetrade), and scoring rationales are provided for each evaluated chapter. Of the 22 chapters analyzed, we found 15 to be liberalizing (scores above 5), 5 to be protectionist (scores below 5), and 2 to be neutral (scores of 5). Considered as a whole, the terms of the TPP are net liberalizing – it would, on par, increase our economic freedoms. Accordingly, the authors hope it will be ratified and implemented as soon as possible.”

    • (B) Via Economist Mark Perry of the “Carpe Diem” blog at the American Enterprise Institute, is from President Ronald Reagan’s radio address to the nation on international trade on August 6, 1983:
    • “The winds and waters of commerce carry opportunities that help nations grow and bring citizens of the world closer together. Put simply, increased trade spells more jobs, higher earnings, better products, less inflation, and cooperation over confrontation. The freer the flow of world trade, the stronger the tides for economic progress and peace among nations.”
    • “I’ve seen in my lifetime what happens when leaders forget these timeless principles. They seek to protect industries and jobs, but they end up doing the opposite. One economic lesson of the 1930s is protectionism increases international tensions. We bought less from our trading partners, but then they bought less from us. Economic growth dried up. World trade contracted by over 60 percent, and we had the Great Depression.”
    • (C) The CafeHayek blog, which features a former professor of mine, Economist Don Boudreaux, pulls a quote from Arnold Kling’s outstanding new book on trade for the Cato Institute titled, “Specialization and Trade: A Reintroduction to Economics.”
    • “Many people believe intuitively that it saves resources to “buy local.” Surely, we think, cheese and vegetables from a local farm must save on the energy required for transportation. However, if the grocery store sells cheapesr produce that comes from hundreds of miles away, some factor must offset the higher transportation costs. Chances are, the land elsewhere is more suited to growing crops, so that fewer acres are used to produce a given amount of output. The local land might be better used for housing or as wilderness. 
    • “Water or other resources may be used more heavily locally than on distant farms. Whenever produce from distant farms is cheaper than locally grown produce, the price system is telling us that “buying local” wastes rsources

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