True Progress

Discussions and debates on the merits of various forms of monetary policy–usually relatively technical–have invaded even the mainstream news media of late. One idea often advocated is a return to the “gold standard”, a form of monetary policy in place (although not continuously) sometime after the invention of paper currency until about the 1930′s depending on what country you happened to live in at the time.

While the advocacy in favor of or against a gold standard is often intense (especially in certain circles in the United States and the United Kingdom) specifics on the mechanics and policy implications of implementing such a system are often lacking. Read the rest of this entry »

Good Science?  Bad Science?  What do these mean?  How do we know the difference?  We throw these terms around especially in political and policy arguments as if we all understand what they mean.  Exceptions.  Uncertainty.  Facts.  Theory.  Bias.  These ideas seem to determine whether or not we think any particular scientific idea is good or bad.  Do we have the right idea, or is Science really about something else. Read the rest of this entry »

If we consider development to be the general increase in well being of a population, then we have to recognize that there are times when the increase in one type of measure (real income) is countered by the negative action of another type of measure (disease rates). In these cases, government often steps in to regulate the problem. However, there are times when government regulation is necessary and other times when it is ill-advised. How can we tell the difference? Read the rest of this entry »

So, what happens when the very actions that we each individually take to improve our lives in the end cause detrimental consequences to all of us? The sage might say that the road to hell is paved with good intentions, and she might be right. But, does it have to be that way? Are we doomed to one step forward and one step back? Can we anticipate the things that might go wrong? And, how important is the collective good when compared to personal freedom? Read the rest of this entry »

Energy efficiency is a wonderful investment both for businesses and consumers often paying far better returns than the stock and bond markets. If so, then why don’t we take advantage of it? Increases in efficiency can reduce energy consumption for the same or increasing amount of output. All the while, pollution is reduced and money is saved increasing the health and well being of our communities. Is all of this good news falling on deaf ears? Read the rest of this entry »

When Subsidies are Hard to See

When we think of our governments subsidizing a particular industry we usually envision a nice big check sent to them every year to the tune of millions of dollars from tax revenues. Sometimes, instead, it is that industry that is free from a particular tax that most others have to pay. But, what if instead there are payments in kind that elevate one industry or one form of technology over another. Would we recognize those things as government subsidies? Read the rest of this entry »

Evaluating Solution Effectiveness and Translating Analysis into Policy

This is the fourth article in a five part series.

To date in this series, we’ve looked at objective measures of how to frame a problem, how to determine the causes of that problem, and consider implementing a robust solution to the problem. In the last article, we examined what to do about risk in an environment of uncertainty both from the standpoint of the problem and in the effectiveness of our solutions. In this article, I am going to discuss how we could form policy in a non-political fashion when given that kind of situation. Read the rest of this entry »

What would more effectively reduce pollution from small vehicles?

Recently, there was a significant political argument in the United States about the costs and benefits of increasing the Corporate Average Fuel Economy (CAFE) standards. Increased efficiency, the argument went, would reduce the consumption of fuel, and therefore help restrain fuel prices, also reducing pollution from vehicles causing reductions in greenhouse gasses and even more important things in the immediate term including smog producing substances, which are a major concern in large cities with warm climates like Los Angeles, Houston, Dallas-Ft. Worth, and Atlanta. The counter argument said that the costs would be too high, adding to the prices of vehicles, reducing auto industry revenue, eliminating jobs, and reducing passenger safety. Read the rest of this entry »

The End of Poverty: Economic Possibilities for Out Time by Jeffery Sachs, is an optimistic, forceful argument for the economic potential of developing countries and the necessity of increased in aid from rich countries to realize it.

Jeffrey Sachs is an accomplished macro-economist, currently at Columbia University, who has experience helping poor countries get on track to development. While, often described as left-leaning, he makes strong cases in favor of free-trade, market forces, and the role of the private sector in achieving economic development. He does often tout his own success regarding recommendations for economic reforms that enhanced development in impoverished. However, given the overall pessimistic attitude that many have towards real, subtantial economic development in these difficult places, I am not so sure it was out of place. Read the rest of this entry »

Development as Freedom, by Amartya Sen, winner of the Nobel Prize in Economics, provides a powerful argument that development and progress cannot be measured on the basis of economic output and consumption alone, that personal freedom is a very important and in some areas predominate variable in determining whether progress has been or will be made, and in defining what poverty truly is.

Amartya Sen chooses to describe poverty not as a lack of resources, but as a lack of freedoms. Those freedoms include choosing where to live and work, with whom to associate, freedom to choose our leaders and decide the rules we live by, and many others. This key point is useful in that it does not focus solely on maximization of wealth as a way out of poverty. The problem with poverty is not lack of money, but that lack of money means that people are not free to make their own way in life. They may be trapped being at the mercy of nature, an opressive government, or an economy cripled by bad policy. The conclusion therefore, is that money alone cannot fix the real problem. Government reform, economic liberalization, and the general increase of personal freedoms is the true end we are striving for. Increasing incomes is one of several necessary steps to be accomplished and not an end in and of itself. Read the rest of this entry »