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BadEconomics Discussion Thread, 28 August 2015 (self.badeconomics)

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[–]shunt31 12ポイント13ポイント  (4子コメント)

I'm starting to get a bit annoyed reading what people think about anything tangentially related to economics, and I don't even know that much. The constant spiel of "Immigrants will take your jobs!", "Immigrants are driving up house prices!", "Immigrants are reducing school places and congesting the roads!" is beginning to infect the posters on /r/unitedkingdom. It seems like /r/Europe is going the same way, with the "Immigrants throw rocks at Swedish police!" story that happens to come from a site that says Muslims are rising up, taking over Sweden, and eating Swedish people..

Even things I supported before reading a bit here I know are wrong now, like tax credits being support for companies to pay their employees lower wages (like the EITC in the US) and a higher minimum wage being a good thing. The UK government is increasing the minimum wage to ~$15 an hour in 2020, up from $10 now - at least for people over 25. The problem isn't that you're not being paid enough by your greedy employer to live on, it's that your labour isn't worth enough to cover your cost of living.

I feel your pain, actually-knowledgeable people on this subreddit. Too bad there is zero teaching of economics in school. Imagine if people voted while not knowing any geography.

[–]TychoTiberiusKeynes never died, he just changed his name to Satoshi. 5ポイント6ポイント  (0子コメント)

That's exactly why I come. It's a breath of fresh air to read and discuss with people who are knowledgeable. Or people who are at least open minded to econ and willing to learn things that go against their priors.

I was just reading the post on the front page about NY rent inflation. The whole thread is bad, but I gmhad to stop once someone said that economists will never tell you that value is a bs term because it's subjective and econ is a pseudo science. The way he said it, with such confidence like he's got it all figured out and all those economists who've spent tens of thousands of hours steeped in econ are all dumb because if they used common sense they could have figured everything out in 5 minutes. It made my blood boil so I had to come here to cool down.

[–]urnbabyurnNeoPanglossian 6ポイント7ポイント  (2子コメント)

The new reddit view is that NAFTA destroyed jobs and unions.

[–]shunt31 2ポイント3ポイント  (1子コメント)

Ah, how could I forget free trade is just fatcat neocon neoliberal capitalist executives lining their pockets with the blood, sweat and tears of poor, hardworking American/Britisyh workers, and simultaneously paying the dirty Mexicans/Romanians.

I may have overdone it there.

And what's with the tiny number of comments here? It's been 5 whole hours!

[–]urnbabyurnNeoPanglossian 0ポイント1ポイント  (0子コメント)

And what's with the tiny number of comments here? It's been 5 whole hours!

I set the posts to drop in the middle of the night. It gives us something to wake up in the US at least.

[–]TychoTiberiusKeynes never died, he just changed his name to Satoshi. 3ポイント4ポイント  (1子コメント)

Why does no one ever talk about automatic stabilizers when people argue about progressive vs flat taxes or welfare. I always bring the subject up, that automatic stabilizers are an important part of the economy, when people argue for flat taxes or abolishing transfer payments, but I have never heard anyone talk about stabilizers outside of a college classroom.

Are they as not a big of a deal as I think they are? Have I become bad econ?

[–]MrDannyOcean 0ポイント1ポイント  (0子コメント)

when people argue for flat taxes or abolishing transfer payments,

Because 99% of the time these arguments are ideology-driven.

[–]Nottabird_Nottaplane 2ポイント3ポイント  (7子コメント)

Is he/she/it right on the topic of minimum wage?

[–]CutlasssI am the Lord your Gold 2ポイント3ポイント  (3子コメント)

That seems reasonably well written. Invite that person to come post in /r/badeconomics.

[–]besttrousers"Then again, I have pegged you for a Neoclassical/Austrian." 1ポイント2ポイント  (0子コメント)

Yep, looks good.

[–]urnbabyurnNeoPanglossian 1ポイント2ポイント  (0子コメント)

Reads fine to me. I'd have some beef with minor points - a price control is "artificial" by definition so it's weird to say it's artificially high in PR. It's "higher" in PR in the sense that the prevailing wages are lower, as far as I know.

Imperfect price rationing is relevant,my it so is imperfect competition.

Overall, pretty good summary, A-

[–]UltSomnia 0ポイント1ポイント  (0子コメント)

Next time go with singular they.

[–]UltSomnia 2ポイント3ポイント  (17子コメント)

Is real analysis actually used in economics? I feel like this class will kill me.

[–]somegurkWhy doesn't modern medicine use more leaches? 2ポイント3ポイント  (0子コメント)

Not from the U.S. so never did that subject as a stand alone, looking at the wikipedia page though yeh you will see bits of it crop up, mainly in micro from my experience. The nuts and bolts of how you create indifference curves and a unique utility value for each curve.

[–]Jericho_Hill#StickyLivesMatter #OverthrowTheMods 2ポイント3ポイント  (8子コメント)

It is but it isn't. You will only need pieces

[–]UltSomnia 0ポイント1ポイント  (4子コメント)

But would it show up in a masters or only PhD? I don't really enjoy math classes that much but my advisor said math major would help in the job market after graduation.

[–]fmn13Canadian Labor Reserves 1ポイント2ポイント  (1子コメント)

I was under the impression it only helps if you're doing a PhD, while for a master's it's an overkill.

[–]Jericho_Hill#StickyLivesMatter #OverthrowTheMods 0ポイント1ポイント  (0子コメント)

I did a PhD without it

[–]urnbabyurnNeoPanglossian 1ポイント2ポイント  (0子コメント)

It would be useful for the first year sequence in either. But others seem to disagree here...

[–]somegurkWhy doesn't modern medicine use more leaches? 0ポイント1ポイント  (0子コメント)

I would expect to see it in master's micro definitely.

[–]urnbabyurnNeoPanglossian 0ポイント1ポイント  (2子コメント)

Isn't Real analysis is just a proofs class with the end goal of reaching the Real number axioms and major theorems.

[–]Jericho_Hill#StickyLivesMatter #OverthrowTheMods 0ポイント1ポイント  (1子コメント)

and ive never done proofs really, its like micro 1 and then not mentioned

[–]urnbabyurnNeoPanglossian 0ポイント1ポイント  (0子コメント)

Really? You never proved Roy's Identity? You've never proved the envelop theorem? MY whole first semester of micro was proving these minor details of consumer choice and costs. You must have at least done the proof of OLS being BLUE.

[–]urnbabyurnNeoPanglossian 1ポイント2ポイント  (6子コメント)

The analysis part refers to it being a proofs based class, IIRC. While on a practical level, applied economics isn't going to necessarily require that, all economic theory does require being able to write proofs, macro, micro, econometrics. If you aren't versed in proofs, you will struggle in grad school.

And while you can get a better Tbone from the butcher than by shoving your hand in a cows ass, sometimes it better to just do it yourself.

[–]polscimsoc 0ポイント1ポイント  (2子コメント)

And while you can get a better Tbone from the butcher than by shoving your hand in a cows ass

TIL

[–]urnbabyurnNeoPanglossian 0ポイント1ポイント  (1子コメント)

Tommy boy quote in reverse. Seemed relevant.

[–]polscimsoc 0ポイント1ポイント  (0子コメント)

Ha didn't even realize it.

[–]UltSomnia 0ポイント1ポイント  (2子コメント)

I was just thinking that, if I did not grad school an econ ba wouldn't be great for the job market while my advisor said a double econ/math major would be.

[–]urnbabyurnNeoPanglossian 0ポイント1ポイント  (1子コメント)

For the job market directly from UG? I don't think its all that important TBH. Specific skills are good - so if you have programming or econometric/data skills, that can give you a leg up in certain places. But the general math v econ v dual major is more of a ribbon on the package than all that important of a distinction.

It matters more for the grad schools.

[–]UltSomnia 0ポイント1ポイント  (0子コメント)

Well that's what my advisor was telling me from his experience. It's too late for me to get a cs degree I just don't want to waste a time of my life that should be enjoyable on annoying math classes.

[–]Shiloh86Mises Did Nothing Wrong 2ポイント3ポイント  (0子コメント)

Did the flat income tax "work" in the Baltic states and in Hong Kong? I mean, I know all those countries are very prosperous, but did the flat tax contribute to that?

[–]Aqwis 0ポイント1ポイント  (2子コメント)

A common theme in /r/Europe discussions about the transition from communist to capitalist economic systems in Eastern Europe is that important national industry/other businesses in the transitioning countries were "stolen" from them by foreigners/foreign countries (particularly Germany), and that this negatively impacted the economies of said countries.

Is it true that it would in fact be better for these formerly communist countries if ownership of previously government-owned industry/businesses were still in the hands of locals (or even not privatized at all), or is this bad economics?

(Another unrelated question if anyone wants to bother: How much of an economic advantage does having famous, top-ranked universities give a country? Germany has very few or no universities that appear near the top of international university rankings, while the UK has many. Does this give the UK a real economic advantage compared to Germany? If so, where does the greatest effect come from: from the mere fact that those universities gain prestige from appearing near the top of highly rankings, which helps them attract the very brightest foreign students, or from actual differences in the quality of top UK universities vs top German universities, which makes UK graduates more skilled at their jobs?)

[–]CutlasssI am the Lord your Gold 0ポイント1ポイント  (1子コメント)

IMHO the former Soviet Block countries would have done better to take all their industries and give them to the people who worked there. Let them either run the places or sell them. As it is, especially in Russia, the local kleptocrats got most of the benefits of privatizing them. And that hasn't been good for those nations.

[–]SubotanEcon-senpai~~ 1ポイント2ポイント  (0子コメント)

Uh isn't that exactly what happened? And proto-oligarchs bought all the shares off confused workers who had spent generations under a planned economy for peanuts?

[–]MajromaxPolitics. Mathematics. Tea 0ポイント1ポイント  (0子コメント)

In Austrian Business Cycle Theory, as I understand it the notion is that too-loose money causes economic malinvestment and a real "bubble," which inevitably causes a recession down the road.

What, if anything, does this theory say about the effects when money is too tight?