The Electric Commentary

Friday, May 13, 2005

Krugman, Caplan, Krauthammer

Pauly K shows concern for the less fortunate. He also compares apples to oranges. First, the apples:

In 1968, when General Motors was a widely emulated icon of American business, many of its workers were lifetime employees. On average, they earned about
$29,000 a year in today's dollars, a solidly middle-class income at the time.
They also had generous health and retirement benefits.

Now, the oranges:

The average full-time Wal-Mart employee is paid only about $17,000 a year. The company's health care plan covers fewer than half of its workers.

This comparison did not make me think that Wal-Mart workers are underpaid. It made me wonder whether the average middle class worker was better off now than in 1968, or if Wal-Mart jobs were in any way comparable to blue collar factory jobs. Why not include grocery store workers or short order cooks, if we're going to include Wal-Mart cashiers and stock boys along with assembly line workers?

Also, $29,000 in today's dollars? I'm willing to bet that a higher percentage of people these days make more than 29K than in 1968 (and that the mean and median incomes are both higher today). I'm also willing to bet that their work is less back-breaking and their quality of life is better.

Next we turn to Arnold Kling's blogmate Brian Caplan:

Some Nobel prize-winning economists keep investing foolishly even though they know better, according to a recent L.A. Times article. Here are their statements, ordered from bad to worse:

Harry Markowitz, father of modern portfolio theory, put half of his assets in stocks and half in low-risk assets. Now he says "In retrospect, it would have been better to have been more in stocks when I was younger." OK, maybe the equity premium puzzle had yet to be discovered.

Clive Granger: "I would rather spend my time enjoying my income than bothering about investments." Isn't there some connection between the two?

Daniel Kahneman is more culpable: "I think very little about my retirement savings, because I know that thinking could make me poorer or more miserable or both."

But George Akerlof aggressively seizes the booby prize. He apparently keeps his wealth in money market funds and the like. His justification? Less than zero: "I know it's utterly stupid."

The whole article reminds me of a quote I wrongly attributed to Einstein instead of Thomas Szasz: "Clear thinking requires courage rather than intelligence." It's sad that such eminent economists know the smart thing to do but fail to follow through.



And let's finish up with Charles, on the "nuclear option":

Senate Majority Leader Bill Frist seems intent on passing a procedural ruling to prevent judicial filibusters. Democrats have won the semantic war by getting this branded "the nuclear option," a colorful and deliberately inflammatory term (although Republican Trent Lott, ever helpful, appears to have originated the term). The semantic device reminds me of the slogan of the nuclear freeze campaign of the early 1980s: "Because nobody wants a nuclear war." (Except Ronald Reagan, of course.)

Democrats are calling Frist's maneuver an assault on the very essence of the Senate, a body distinguished by its insistence on tradition, custom and unwritten rules.

This claim is a comical inversion of the facts. One of the great traditions, customs and unwritten rules of the Senate is that you do not filibuster judicial nominees. You certainly do not filibuster judicial nominees who would otherwise win an up-or-down vote. And you surely do not filibuster judicial nominees in a systematic campaign to deny a president and a majority of the Senate their choice of judges. That is historically unprecedented.

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