If Grocery Stores Were Run Like K-12 Schools

Don Bourdreaux makes the point about the absurdity of the monopoly K-12 education by imaging what the grocery industry would look like if it were run the same way.

News reports would regularly include stories of “grocery experts” offering new and “pioneering” proposals to improve grocery distribution, and of the citizens of “grocery districts” meeting with their local “grocery boards” to discuss and debate these different proposals. ”Professors of Groceries” in all the top “Schools of Groceries” across the land would debate with each other and with the public the whys and why-nots of the failure of the latest scheme to make America again #1 in international measures of grocery distribution.  Newspapers of record would regularly feature headline reports on the “grocery crisis.”

Ordinary men and women – physicians, electricians, cab drivers, auto mechanics, professors of economics, web designers, kennel owners, carpenters – almost none of whom have the slightest bit of expertise or experience to qualify them to assess the different methods proposed to deliver groceries, would nevertheless be expected to have such an opinion, and they would be applauded if and when they attend the next meeting of the “Grocery Board” to express their opinions on how best to supply groceries.

Anyone proposing to get government out of the grocery-supply business would, of course, be ridiculed as being totally unrealistic or being an out-of-touch ideologue, or accused of harboring a secret desire to see the the vast majority of people starve while only the top one percent of the population continues to enjoy excellent access to superb groceries. 


Read the whole thing here http://cafehayek.com/2015/01/if-groceries-were-supplied-like-k-12-education.html

Powerball Economics

Ever notice what happens the week after someone wins the Powerball jackpot and the prize gets reduced? The number of people trying to win it decreases dramatically, even though the odds of winning haven't changed a bit.

State governments long ago figured out this aspect of human behavior. That's why you won't see them advertising "We're reducing the size of the jackpot if you win!" Yet that's exactly what the Obama Administration is doing. They are shouting as loudly as they can their determination to reduce the size of the jackpot for entrepreneurs that manage to create a profitable business. "If you create a small business that earns more than $200,000, we'll raise your taxes!" is the President's mantra.   And if that doesn't motivate you enough, he promises to tour the country giving speeches demonizing you.

Economic growth and employment are dependent on entrepreneurs and the investors that back them taking big risks to create successful new businesses. The smaller the jackpot, the fewer people you will have risking their time and money to buy a ticket. It's possible that reducing the payoff for success makes good politics, but it's really bad economics.

Real Real Estate

When I was growing up nobody thought of buying a home as a great financial investment. It was something you needed -- like clothing or food. Then the economic Wizards of Washington (who responded with Pavlovian predictability to the lobbying of the real estate, construction, and banking industries) decided to more heavily subsidize mortgage debt. Everyone must own a home. everyone will benefit from owning a home (see "You can fool some of the people all of the time").  But, then, as it always dies, economic reality intruded on the fantasy party. Now, guess what? Real home prices have fallen back to their real economic value. It will probably be, oh, another 30 years before they'll be able to fool another generation.

Green Jobs Meets Bayes

Below is data from the Employment and Training Administration  (Department of Labor) relating to the grants that were provided under the “Stimulus” bill to train workers for “green” jobs.  It compares estimates that were made to justify the grants versus results actually obtained. Bayesian analysis would suggest that this data should alter Congress’ expectations about such programs. Think it will? 

Consider your own job. How long do you think your employer would continue to pay you to do projects that never even came close to the projections you gave?