Recomendaciones

24/09/2009

100 Best Blogs for Econ Students

Bank Pay and the Financial Crisis by Jeffrey Friedman

G-20 accounting rules, not bank bonuses, put the system at risk.

Regulations homogenize. The Basel rules imposed on the whole banking system a single idea about what makes for prudent banking. Even when regulations take the form of inducements rather than prohibitions, they skew the risk/reward calculations of all capitalists subject to them. The whole point of regulation is to make those being regulated do what the regulators predict will be beneficial. If the regulators are mistaken, the whole system is at risk.

That was what happened with the G-20’s own Basel rules. Now the G-20 has decided to blame the crisis on bank compensation systems, which it proposes to homogenize just as it had previously homogenized bank capital allocation. What has not been explained is why we should trust that the G-20’s regulations won’t be mistaken once again.

Causes of the crisis

Juan Ramón Rallo, Los complementos monetarios

CATO Unbound: The Monetary Lessons of the Not-So-Great Depression

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Vernon Smith Prize for the advancement of Austrian Economics

23/09/2009

Vernon Smith Prize for the advancement of Austrian Economics.

Capitalism and creative destruction.


Recomendaciones

23/09/2009

The Imperial Origins of State-Led Development, by William Easterly. Imperalism and free markets do not go hand in hand.

What’s Wrong with Macroeconomics?

The Great Moderation in Macroeconomics, by Mario Rizzo

Ángel Martín Oro

Planificación central o libre mercado en la enseñanza, por Albert Esplugas

Berta García Faet sobre el concepto de libertad.


Alarmismo climático de Durao Barroso

22/09/2009

Titular de Jose Manuel Durao Barroso:

El planeta, al borde del abismo

El cambio climático se está produciendo mucho más rápido de lo que creíamos hace solamente dos años. Continuar como si no pasara nada significa casi, con certeza, encontrarnos ante un calentamiento del planeta peligroso, quizá catastrófico, durante el curso de este mismo siglo. Éste es, sin duda, el desafío más importante para la actual generación de políticos del mundo.

Mañana volverán a asustarnos, a intentar captar nuestra atención y a justificar sus incrementos de poder asegurando que el cambio climático sucede aun más rápido de lo que creemos hoy. Y como los políticos se creen ungidos para resolver los problemas del mundo, seguirán siendo incapaces de imaginar que tal vez la acción política sea peor que la adaptación distribuida y libre a las situaciones potencialmente cambiantes y problemáticas.


Jordi Sevilla y los impuestos

20/09/2009

Jordi Sevilla quiere participar en “El debate de los impuestos”.

Los impuestos cristalizan las diferentes ideas sobre la justicia social y la naturaleza de los vínculos que nos unen.

Efectivamente los impuestos tienen mucho que ver con ese engendro vacío que es la justicia social; con lo que no tienen relación es con la justicia, donde no cabe eso de votar para quitar a unos lo que es legítimamente suyo y dar a otros lo que no es suyo. Los impuestos tienen que ver con los vínculos que nos unen de forma coactiva e involuntaria: esa es su poco ilustre naturaleza.

El acuerdo mínimo está en la Constitución, que dice que todos los españoles (incluso ésos que parecen preferir dar su sangre por la patria antes que su dinero) tienen el derecho y el deber de contribuir a las cargas generales del Estado, en función de su capacidad de pago. Es decir, tenemos la obligación constitucional no sólo de pagar impuestos, sino también de hacerlo de una cierta manera. Por tanto, quienes piensan que el mejor impuesto es el que no existe (no digamos el que no se paga), atentan contra esa Constitución que dicen defender.

La Constitución es obviamente muy mejorable. Algunos pensamos que el mejor impuesto es el que no existe y no la defendemos. Otros tal vez son patriotas dados al heroísmo militar pero hartos de que les roben, sobre todo un gobierno socialista. Pero lo que dice la ley suprema (no precisamente por su calidad) respecto a los impuestos en su sección segunda (De los derechos y deberes de los ciudadanos) es:

Todos contribuirán al sostenimiento de los gastos públicos de acuerdo con su capacidad económica mediante un sistema tributario justo inspirado en los principios de igualdad y progresividad que, en ningún caso, tendrá alcance confiscatorio.

O sea que los españoles tienen el deber de pagar impuestos, no el derecho de hacerlo que queda bastante ridículo: puede usted elegir (derecho negativo) o exigir (derecho positivo) hacer algo que es obligatorio. La misma tontería del derecho y el deber de defender España. Queda especialmente gracioso que se describa un sistema progresivo como justo: ¿dónde quedó aquello de dar a cada uno lo suyo?

Además la Constitución no habla simplemente de capacidad de pago, que podría darse con impuestos proporcionales, sino que exige progresividad.

Según Sevilla los impuestos “son el fundamento de los derechos (libertad)”. Es difícil que basen tu libertad en quitarte tu propiedad, el ámbito donde se supone que ejerces esa libertad. Pero es que como socialista le encanta pervertir el lenguaje y hablar de libertad cuando quiere decir poder y riqueza.

Además los impuestos son “solidarios (igualdad), y exigir impuestos obligatorios en democracia fortalece la cohesión nacional (fraternidad)”. Sólo entiende la solidaridad como algo forzado, coactivo, centralizado; quizás es que practica poco la solidaridad individual, voluntaria, libre. Y cree que la fraternidad se consigue burocratizando la sociedad y haciéndola dependiente del Estado. La cohesión social mediante cuerdas que nos atan unos a otros en contra de la libre voluntad de alguna de las partes lo que contribuye es al resentimiento y al rencor social: es la cohesión de las piedras y otros objetos inertes.

El impacto de los impuestos sobre la conducta y las decisiones de los ciudadanos y empresas es objeto de amplia discusión entre los expertos, sin que un consenso basado en evidencias empíricas concluyentes haya sido posible hasta la fecha. Mi impresión, no obstante, es que para que una medida tributaria tenga impacto modificando alguna conducta o decisión tomada, debe ser de gran magnitud y persistencia.

Claro, y la revolución marginalista no sucedió o Sevilla no fue ese día a clase en Económicas. La curva de Laffer es ciencia ficción para este ilustre genio (asegura que se trata de una “pirueta académica”), o tal vez con su corta vista de luces largas él la ve como una función salto discontinua.

Resulta difícil defender que alguien se haya comprado una vivienda, o haya efectuado determinada inversión o contratación, gracias a la existencia de una ayuda fiscal. Antes bien, se toma la decisión por otras razones y luego, intentamos optimizarla aprovechando el catálogo disponible de beneficios tributarios. Así, se abarata el coste de ciertas decisiones, pero difícilmente podremos inducirla.

La diferencia entre comprar y alquilar vivienda a menudo se debe a razones fiscales. La inversión en planes de pensiones, que básicamente son fondos de inversión con restricciones legales, depende fuertemente de su trato fiscal. Si cree que los inversores extranjeros no consideran la fiscalidad de sus inversiones está en la más completa inopia.

Con todo, el debate menos frecuente y más interesante es, sin duda, el de la legitimidad.

Será el debate menos frecuente en su ámbito socialista, donde la coacción se acepta con total naturalidad.

El Estado extrae recursos a los ciudadanos de manera obligatoria para atender necesidades sociales. En democracia, para poder hacerlo de manera legítima tiene que atender a tres principios: que todos paguen, que lo hagan en función de sus posibilidades y que se demuestre que esos recursos se gastan bien, en políticas conocidas y eficaces que consiguen los fines previstos y anunciados.

El Estado confisca riqueza para atender necesidades estatales, sobrevivir como parásito sobre la sociedad y crecer todo lo que pueda. La legitimidad podría ser también que nadie pagara impuestos (igualdad) y que todos los servicios se financiaran mediante cuotas por uso o disfrute (justicia). Un impuesto legítimo podría ser una cantidad fija para cada ciudadano independiente de sus ingresos o riqueza. Pretender que los impuestos se gastan bien es política ficción, salvo para los que los reciben, que les hace muy felices.


On private and state paper currency and counterfeiting

20/09/2009

Informative, but:

Beginning with Massachusetts in 1690, the colonists pioneered the first government-issued paper money to appear in the Western world.

All the colonists agreed that it would be a good idea that their government issue paper money? Or was it the government which decided (maybe with some popular support) that it would issue paper money?

Convicted counterfeiters generally avoided the gallows, for the simple reason that the demand for money — real or counterfeit — outstripped the supply, and many juries saw counterfeiters as performing a public service.

Demand for real money not different from demand for counterfeit money? How strange that a government is not able to produce enough real money to satisfy the demand. Counterfeiters providing a public service by falsifying debt documents in order to gain wealth at the expense of others naive enough to accept their notes? It looks like popular juries are not always a good idea.

Most of the paper money in circulation came from private banks, not public governments. Counterfeiting was thus a crime aimed at a corporation, not the state. That meant that punishment was even less of a deterrent: a few years in prison, tops. Given that many of the banks issuing paper money were viewed as “legal counterfeiters” by people critical of unsavory banking practices (subprime lending is just the latest chapter in this country’s reliance on shaky credit), juries weren’t too willing to send someone to prison for imitating the notes of a bank whose own right to issue notes was far from accepted.

The state is supposed to defend private citizens from aggressions or breaches of contract, but it does not show much enthusiasm or ability at this task; what it really does is defend itself, and it did not have the monopoly on money issue yet.

If you do not accept the right of a bank to issue notes, just do not accept them yourself and do not try to pass them on to others if you happen to possess them. Also notes from low quality banks would tend to be less trusted, so counterfeiters would not seem to be very intelligent if they forged those notes instead of the ones from trusted banks.

All of this together meant a corruption of commercial ethics. Businessmen had a saying before the Civil War, which more or less went as follows: “Better a good counterfeit on a solid bank than a genuine note on a shaky bank.” What was genuine and what was counterfeit mattered less at this time than whether or not a note could be palmed off on someone else.

This really is corruption: it is better to try to cheat on others than to assume your risks or losses yourself. One of the biggest problems with money is the lack of distributed control of the institution, when individuals do not accept their own responsibility in controlling the quality of the circulating medium of exchange and just hope that others will be as careless as they have been; when the problem gets big enough they might demand that government intervenes in order to regulate money, and the ability to adapt and compete of the free system will disappear.

Counterfeiting contributed to economic growth, pumping much-needed (or much-wanted) credit into the economy, and helping to fuel the era’s breakneck economic growth. Such was especially the case in newly-settled regions of the country, where the demand for a medium of exchange was so great that people handling money were willing to overlook the fact that much of the paper in circulation was bogus.

Fake credit is not the same as real credit (are people still surprised about the current financial crisis?). Growth with fake credit is unsustainable. It might happen that people used fake documents as internal money in a closed area if local banking institutions were absent, but they would have trouble using that counterfeited money for trade with other areas where it would not be accepted. It would also be a highly unstable system, depending on trust that could suddenly vanish and prone to abuses.

When the South seceded from the Union, the North faced a serious funding crisis. Eventually, Lincoln’s administration reached for one of the only options available to them: the printing press. They issued paper money backed by the federal government (though the notes weren’t redeemable in “real money” for several years). These notes were the greenbacks, and for the first time, the nation had a uniform common currency. In time, economic nationalists passed legislation taxing the old system of private banknotes out of existence.

Government money is not a result of the spontaneous working of the free market. In this case it took a war to start the issue and a tax to destroy the private competition.

But the raft of legislation passed during the war gave the old banks an option: they could trade in their state charters for new, federal charters so long as they bought some treasury bonds (thus helping to pay for the war). In exchange, they got the right to issue notes.

The state gets a privilege to issue notes and quickly uses it to finance itself with the help of banks that depend on it. Soon the supply of money could not grow enough because there was not enough government debt to back it up.

These weren’t like the old notes, where banks got to choose the designs. Now, the federal government dictated the design; the only thing that differed in a given denomination of these new “national bank notes” was the name of the bank; everything else was standardized and chosen by the Treasury Department. All this new money was national in appearance: national heroes like the founding fathers were now in vogue.

This surge of nationalism meant a change in the climate of counterfeiting. What had formerly been a crime against often disreputable financiers was now a crime against the federal government. Anyone foolish enough to knock off imitations of the new currency now faced long jail terms and heavy fines.

Money is used as state tool to promote nationalism. Money is not the universal means of exchange any more: now it is enclosed within national boundaries. Financiers could be disreputable and prosecuted; government officials, even though they might occasionally be reputable, are the ones in command of the police, the courts and the jails, and they are not happy if someone interferes with their financial misdeeds.

Once the country began moving down the path of a common national currency, people started looking at money differently. Money became a means of cementing people’s allegiance to the United States: by handling it, you were tacitly putting faith in the fiscal rectitude of the nation.

At the same time, there’s a kind of blind trust that affects how we handle the currency in our wallets nowadays. Our money is so safe (for the most part) that we don’t even inspect it, save for the rare occasion when we get a high-denomination bill. Unlike people before the Civil War, who often spent several minutes inspecting every bill they received, we don’t look at our money. In fact, I suspect that many Americans can’t even remember the bills on which, say, Hamilton, Lincoln, Jackson, Grant, or Franklin appear, much less what shows up on the back of those bills. We trust our money so much now that we’re practically blind to it.

The land of the free becomes the land of the dependent on government, who trust it and believe that it can have fiscal rectitude. Blind trust in any institution destroys it, and that is the basic reason for our current problems with money and finance. Institutions only work if all persons using them contribute to their control.


Greg Mankiw on health care inequality

20/09/2009

Interesting, but:

An optimist might hope that my doctor, or someone higher up in the health care hierarchy, made a rational cost-benefit calculation on society’s behalf. To figure out whether my treatment makes sense, one would have to weigh the cost of the drug against the benefit of an extended life. And to do that, one would have to put a dollar value on my life — the kind of calculation that makes everyone but economists squirm.

Who is that “one” who weighs costs and benefits and puts dollar values on lives? Cost-benefit calculations on society’s behalf make very little or no sense. Only individuals value, and they do so subjectively. Aggregating individual valuations is absurd. There is no objective value of a life. A treatment makes sense for you if you value the life extension it could provide for you more than what it costs to you.

With collective issues such as socialized health care it is not the case that someone at the top wisely decides on society’s behalf. Those at the bottom will support the policies that they think will give them concentrated benefits while diluting the costs (I mostly benefit, others mostly pay for it). Individuals may care for other individuals, so they might also support political measures which do not benefit themselves directly but which benefit others they care for. Individuals also care for ideas like ethical values or principles of social organization, so they might support more egalitarianism or more freedom.

The politicians at the top try to pass the legislation that will keep them in power (or give it to them if they are out of power), so they attempt to produce more popular legislation (keeping the votes they had, winning some more and not losing too many), but voters cannot consider each issue separately, with just one vote for a candidate or a full political program they cannot differentiate which policies they like (and how much) and which policies they do not support.