Ask an Economist (Post #1005 and counting)

[Homie]

I couldn't care less about exports and imports. In the long run, that all balances.

Amen! It feels good to agree sometimes
Goodgame, the era of the mercantalists has passed. It is not like exports equal a good thing and imports equal a bad thing.

Homie:
That was confusing. What I mean is that there is no ceteris paribus in real life, therefore we cannot make a conclusion about how economics works from history, because there may be factors at play that are not calculated in.
JH: Agreed.
I don't mean to be a douche here and throw your words back in your face. But remember how you said that history showed that stabilization policy is successful because business cycles have become less extreme? I replied to that by saying basically the same thing I just said above. You didn't agree then. I'm happy you do now though

 

[ArneHD]

What is the relationship between Economics and Psychology and/or Sociology? As far as I can tell, economists do a lot of work that would seem to overlap with these two areas.

 

[Homie]

What is the relationship between Economics and Psychology and/or Sociology? As far as I can tell, economists do a lot of work that would seem to overlap with these two areas.

You would be right on! All those three are considered social sciences in the American university system. At my liberal arts college, you are required to take one social science class regardless of your major, it can be any of these three. Of course economists have a greater chance of getting a job and making more money

 

[Gainy III]

Yeh it is the same here Homie. At the University of Glasgow I did economics with statistics in the faculty of science but strictly speaking I think it was regarded as a core social sciences subject.

 

[JerichoHill]

In the European Union workers can travel and work freely. Is it tangibily more beneficial for a worker of one's nation to be employed by the nation -- for the nation -- than for a foreign EU citizen to be employed in the said nation then to emigrate in accordance with employment?

Would the circumstance of benefit require the nation to value the EU over themselves, assuming these names can be seperated?

Better for the nation, which is why the EU has some very weird labor movement agreements between nations. Assuming that folks can sort themselves freely with little barriers, free movement of labor is a good thing...Sadly, the EU does not have truly free movement of labor

 

[JerichoHill]

Homie

For the purposes of this post, dumping = selling goods at a very low price, just to get rid of overproduced goods.
okay

Hehe, there is that anti-trust thinking again. Like I've said before, I don't think companies in a free market can be successful by acting anti-competitively.
Oh yes they can! Microsoft did a wonderful job of that...and they hid the anticompetitiveness stuff very well away from our laws too! We couldnt' touch them on alot.

Of course the government is distorting that by subsidizing, giving American and European farmers an edge, maybe enough of an edge to effectively use the threat of predatory pricing. So you might have a point here, because it is not a fully free market situation.
Allright.

1. Western farmers receive subsidies, and are thus able to produce enormous amounts of food, more than they can sell to domestic markets.

2. The surplus can then be thrown in the ocean or sold for a very low price to poor countries, they choose the latter. The Westerners figure they are helping the poor and at least making some money on the food that would otherwise go to waste. Win-win.

I don't think they are thinking about using their market power to quench would-be newcomers by using predatory pricing.
No, I dont think your average farming corporation is actively trying to harm 3rd world consumers. I'd argue that is the de facto effect however, despite any good intentions.

If this is true, then the price for the foods "dumped" on Africa is low, actually low - not a threat of being so low as to drive out competition, but really low. So the farmers in Africa are out-competed by the West, but Africans get real cheap food, and can divert their freed up resources to meet other needs, perhaps housing - construction? But I'm not a central planner, I'm not gonna pretend I know where best to put their resources to use.
Well, Africa really doesnt have capital intensive industries. Typically an economy would go from agri-industry. I see them as missing a step

Think about it, if what you are saying is true then the Africans could simply put up a trade embargo with the West and they would be better off, because their Agricultural industry would be protected. When has protectionism ever benefited a country? Rhetorical question, the answer is never.
No, its never been a benefit. And I'm not saying they'd be better off with no trade. I think they'd be better off if they didn't have to compete with heavily subsidized foreign goods. The same complaint can be said in the US of Chinese goods, in some industries where China heavily subsidizes.

Agriculture is prone to good years and bad years, no matter how much technology is involved. So even though the West often produces a large surplus, sometimes it doesn't, which means that Africa doesn't get the cheap foods dumped on them, which leads to hunger and poverty.
Sounds right.


To this I say: Why wouldn't the Africans be able to adapt to supply shocks like everyone else? Last I checked, the Africans are no longer considered to be ******** monkeys, but capable people.
Their economic ministers are pretty awful, with a few exceptions, private property rights are not respected, and a few key judicial institutions lack credible threat, Africa lacks good infrastructure, their government policies tend to lead to overproduction on the land...

 

[JerichoHill]

Homie:
That was confusing. What I mean is that there is no ceteris paribus in real life, therefore we cannot make a conclusion about how economics works from history, because there may be factors at play that are not calculated in.
JH: Agreed.
I don't mean to be a douche here and throw your words back in your face. But remember how you said that history showed that stabilization policy is successful because business cycles have become less extreme? I replied to that by saying basically the same thing I just said above. You didn't agree then. I'm happy you do now though

You did say something similiar, but the questions were very different. I can state with certainty that the modern US economic cycle is behaving very differently than the previous cycles. Most of my evidence here comes from "MOnetary History of the United States", that great Friedman work.

 

[JerichoHill]

You would be right on! All those three are considered social sciences in the American university system. At my liberal arts college, you are required to take one social science class regardless of your major, it can be any of these three. Of course economists have a greater chance of getting a job and making more money

Yeah, he's right.

Sadly, at most American higher institutes of learning, economists think themselves as better than other social scientists and think that they can have the same scientific rigor that physics does...

Sigh...

 

[Gainy III]

Better for the nation, which is why the EU has some very weird labor movement agreements between nations. Assuming that folks can sort themselves freely with little barriers, free movement of labor is a good thing...Sadly, the EU does not have truly free movement of labor

Cheers. What makes it tangible?

 

[Homie]

JH:
Well, Africa really doesnt have capital intensive industries. Typically an economy would go from agri-industry. I see them as missing a step
So they'll start up capital intensive industries. What else are they going to do, sit around all day and complain? Israel went from a patch of desert to a booming, modern, Western-style nation with high tech industries and farming through irrigation where there was no green before, in just 50 years! Lots of Asian countries went from dirt poor to booming countries in the same time.

Homie:
Think about it, if what you are saying is true then the Africans could simply put up a trade embargo with the West and they would be better off, because their Agricultural industry would be protected. When has protectionism ever benefited a country? Rhetorical question, the answer is never.
JH:
No, its never been a benefit. And I'm not saying they'd be better off with no trade. I think they'd be better off if they didn't have to compete with heavily subsidized foreign goods. The same complaint can be said in the US of Chinese goods, in some industries where China heavily subsidizes.
OK, I'm asking you now JH: Why don't the Africans put massive tariffs on Western Agri products, so as to effectively block them out? This is not a rhetorical question. If what you are saying is true (Western dumping makes them worse off), why don't they put up those barriers to trade? Not a full-on trade embargo, but just big tariffs against those specific goods. Furthermore, do you think they should?

Homie:
To this I say: Why wouldn't the Africans be able to adapt to supply shocks like everyone else? Last I checked, the Africans are no longer considered to be ******** monkeys, but capable people.
JH:
Their economic ministers are pretty awful, with a few exceptions, private property rights are not respected, and a few key judicial institutions lack credible threat, Africa lacks good infrastructure, their government policies tend to lead to overproduction on the land...
Exactly! The aforementioned reasons is what I believe is keeping Africa poor, not Western dumping.

 

[JerichoHill]

@@Homie
So they'll start up capital intensive industries. What else are they going to do, sit around all day and complain? Israel went from a patch of desert to a booming, modern, Western-style nation with high tech industries and farming through irrigation where there was no green before, in just 50 years! Lots of Asian countries went from dirt poor to booming countries in the same time.
Isreal is a bad example. Most of their Jewish folks were highly educated. I am fairly sure that Africa's educational system is broken too. Asian countries had sweatshop/industrial labor, true, but they also had strong social networks and ties, which are lacking in Africa (except among competing tribes

OK, I'm asking you now JH: Why don't the Africans put massive tariffs on Western Agri products, so as to effectively block them out? This is not a rhetorical question. If what you are saying is true (Western dumping makes them worse off), why don't they put up those barriers to trade? Not a full-on trade embargo, but just big tariffs against those specific goods. Furthermore, do you think they should?
Cynically, I'd say because their governments are bought off by Western Aid, so to speak. And that's fine, if the aid when to who its supposed to go to, but we know thats not happening.

Exactly! The aforementioned reasons is what I believe is keeping Africa poor, not Western dumping.
I think we could list hundreds of reasons. Is "dumping" one of them... yes. Is dumping more important than countless other reasons....no. I would say they're all intertwined heavily.

 

[JerichoHill]

Cheers. What makes it tangible?

I dont quite get your question.

 

[Gainy III]

Ah ok. Ive had a quick look at the first thread, flicked through a few pages and notice you have not responded to what your professional role as an Economist is.

This one is not related to economies, but your job.

Who are you hired by? The U.S. Government? A Private Firm?

And what do they pay you to do? Speculate on the economy, like what do you bring to the table for your employer?

Maybe I'm seeing things but you seemed to ignore this question, are you able to elaborate now?

 

[JerichoHill]

Gainy,

I'm a US Government Economist. GS Scale, with hopes to go SES soon enough. I'd like to say I work on a specific subject, but in many respects, I work with and assist multiple units within the Department of Justice (which is a fairly large bureaucracy. I used to be attached to Anti-Trust, I am currently attached to Civil Rights, and do work on occasion that relates to the ongoing mortgage issues.

I have been employed at private firms prior, mainly working as a defacto economist with Energy Cooperatives looking at contract efficiencies. I was ... 18 then? Good times.

My job function is essentially, to serve as an internal expert. I write alot of reports, but you'll never see them in journals, as they are internal and proprietary. I serve to advise attorneys, counsels, deputies and chiefs on potential litigation. Most litigations almost always involves some sort of statisticial analysis, be it sociological, economic, demographic, etc. These are things mandated by Congress. I also read and review defense experts' testimony and models, to provide advice to our legal team(s). I also conduct training and classes on statistical techniques and analysis, mainly with an eye to their role in our legal framework.

I've got a BS and MS in Economics, a BS in Social Psychology, and am halfway through my PhD in Economics (which I'd be done with if I wasn't employed ...), a few professional certifications, and am a member of APSA, AEA, SASUG-DC.

I'm unusual for a government economist in my position, in that, most everyone I work with is twice my age with twice the degrees.

I also help run the blog in my signature. I suppose that's my second job.

 

[Homie]

Gainy,

I'm a US Government Economist. GS Scale, with hopes to go SES soon enough. I'd like to say I work on a specific subject, but in many respects, I work with and assist multiple units within the Department of Justice (which is a fairly large bureaucracy. I used to be attached to Anti-Trust, I am currently attached to Civil Rights, and do work on occasion that relates to the ongoing mortgage issues.

I have been employed at private firms prior, mainly working as a defacto economist with Energy Cooperatives looking at contract efficiencies. I was ... 18 then? Good times.

My job function is essentially, to serve as an internal expert. I write alot of reports, but you'll never see them in journals, as they are internal and proprietary. I serve to advise attorneys, counsels, deputies and chiefs on potential litigation. Most litigations almost always involves some sort of statisticial analysis, be it sociological, economic, demographic, etc. These are things mandated by Congress. I also read and review defense experts' testimony and models, to provide advice to our legal team(s). I also conduct training and classes on statistical techniques and analysis, mainly with an eye to their role in our legal framework.

I've got a BS and MS in Economics, a BS in Social Psychology, and am halfway through my PhD in Economics (which I'd be done with if I wasn't employed ...), a few professional certifications, and am a member of APSA, AEA, SASUG-DC.

I'm unusual for a government economist in my position, in that, most everyone I work with is twice my age with twice the degrees.

I also help run the blog in my signature. I suppose that's my second job.

What the heck, you work with people who have twice the degrees you have? I call that overeducated and a waste of resources. Geez, when everyone keeps getting more degrees it dilutes the value of higher education. A bachelor's today is worth as much as a high school diploma 50 years ago.
Let's stop this trend before we have to stay in school til we're 60!

 

[JerichoHill]

What the heck, you work with people who have twice the degrees you have? I call that overeducated and a waste of resources. Geez, when everyone keeps getting more degrees it dilutes the value of higher education. A bachelor's today is worth as much as a high school diploma 50 years ago.
Let's stop this trend before we have to stay in school til we're 60!

Homie,

Please don't insult people's education or backgrounds. Allright. I work with these people, they're incredibly brilliant folk.

A bachelor's degree is equivalent to a high school degree in the past because our primary education system has gotten that bad.

 

[Godwynn]

Is there such thing as over education?

I would consider that a good thing.

 

[Gainy III]

Ah I was aiming for MA Economics while in the faculty of science, I didnt like the sound of a BSc but you seem to be doing well. If it's of interest I did make the change in my 3rd year, and as I understand it adam smith did not graduate but I doubt that would worry him.

Over education Id say its overwhelmingly good

 

[Homie]

Imagine if everyone spent all their lives getting educated, who would work and create actual value?

 

[Gainy5]

As an Economist I would say slaves for optimal value