By Arnold Kling
1. Robin Hanson writes,
We humans are much better at coming up with reasons for opinions than at choosing coherent sets of opinions
He shows a video of students asked about a proposal to redistribute grade-point averages by forcing the “rich” (high-GPA students) to give some of their grade points to the “poor.” Put on the spot this way, students are awkward in their attempts to articulate why it is wrong to redistribute grades even though it is right to redistribute income.
I was curious to see this exercise tried in other contexts. Ask government officials about a proposal to redistribute power, so that voters get to make more budget decisions directly. Ask Ivy League university presidents about a proposal to redistribute college endowments. Ask Ivy League professors about a proposal to redistribute academic status.
2. David Brooks writes,
When asked if they preferred fascism to communism, 39 percent of depression-era Americans preferred fascism and 25 percent preferred communism. Back then, conservatives had an anti-market ideology they could subscribe to. That vision died with World War II and now it is hard to be right-leaning and anti-market.
Read the whole post, which offers some interesting results concerning how anti-market the public was during the Great Depression. I don’t think I buy his last sentence as the explanation of the evolution of post-war ideology, but I need more time to articulate what’s wrong with it.
We asked Oucha Mbarbk what he would do if he had more money. He said he would buy more food. Then we asked him what he would do if he had even more money. He said he would buy better-tasting food. We were starting to feel very bad for him and his family, when we noticed the TV and other high-tech gadgets. Why had he bought all these things if he felt the family did not have enough to eat? He laughed, and said, “Oh, but television is more important than food!”
You’ve probably already seen links to this article, which is shocking in its political incorrectness. I suspect that if the authors had male, Anglo-Saxon names, it would not have been printed.
4. Megan McArdle writes,
I’m basically in the Shiller camp. Corporate profits have been unusually high for the last few years, as weak firms went out of business and firms shed their workforce. The S&P 500’s price-to-earnings ratio is in the high end of its historical range. It’s still within its historical range, to be sure, but after a punishing recession, and with further storm clouds on the horizon, that seems to me to point to a least some level of overvaluation.
She refers to an interesting debate between Robert Shiller and Jeremy Siegel. In addition to Megan’s point, I would add that a suspicious amount of corporate profits accrued to the financial industry, and that could turn around quickly when the Fed stops handing out free lunches to bankers. If you believe the Recalculation Story, then a lot of future profits are in businesses that do not exist today. There firms that turn out to be valuable years from now may not be the ones with shares outstanding at the moment.