"They say "all politics is local." But economic decisions impact the whole economy and reverberate internationally. That is why politicians' meddling with the economy creates so many disasters.
The time horizon of politics seldom reaches beyond the next election. But, in economics, when an oil company invests in oil explorations today, the oil they eventually find and process may not make its way to market and earn a profit until it is sold as gasoline a decade from now.
In short, the focus of politicians is extremely limited in both space and time -- and all the repercussions that lie beyond those limits carry little, if any, weight in political decisions.
Showing posts with label Time Horizons. Show all posts
Showing posts with label Time Horizons. Show all posts
Wednesday, October 19, 2011
Politics vs. Economics - Thomas Sowell
EXCERPTS:
Saturday, July 30, 2011
Freshly Sworn In, Peru President Raises Wages - WSJ.com
EXCERPTS:
"LIMA, Peru—Peru's new president, Ollanta Humala, took the oath of office Thursday, pledging to guarantee the "social inclusion" of the poor and immediately making good on campaign promises to raise the minimum wage and pensions.
The leftist president announced a two-stage 25% increase in the monthly minimum wage to 750 soles, or about $275, and unveiled pension increases for those older than 65.
While he repeated a campaign pledge that social benefits would be funded in part by higher taxes on mining companies, he didn't spell out what form these tax increases would take. The issue is expected to be the subject of intense negotiations between miners and the government.
"LIMA, Peru—Peru's new president, Ollanta Humala, took the oath of office Thursday, pledging to guarantee the "social inclusion" of the poor and immediately making good on campaign promises to raise the minimum wage and pensions.
The leftist president announced a two-stage 25% increase in the monthly minimum wage to 750 soles, or about $275, and unveiled pension increases for those older than 65.
While he repeated a campaign pledge that social benefits would be funded in part by higher taxes on mining companies, he didn't spell out what form these tax increases would take. The issue is expected to be the subject of intense negotiations between miners and the government.
Friday, June 25, 2010
Baby For Sale -- Real Cheap | NBC Bay Area
EXCERPTS:
"Everyone knows you can find just about anything you need for a low price at Walmart -- including baby stuff. But an actual baby? That's not usually part of the deal.
Unless you're desperate for cash and not in the best frame of mind.
That's the case in Salinas, California, where police say a couple tried to sell their 6-month-old baby for $25 outside the doors of a Walmart store. Now they're facing child endangerment charges.
Patrick Fousek, 38, and Samantha Tomasini, 20, were arrested Wednesday, hours after Fousek allegedly approached two women outside Walmart and asked if they'd like to purchase his child -- at the bargain price of $25. The women initially thought Fousek was joking, but when he became persistent, they got suspicious and reported it to police, Salinas police spokesman Officer Lalo Villegas said.
"They did an outstanding job and gave our officers good information." Villegas said. "I don't know if they're mothers but they definitely had that instinct to help."
Fousek and Tomasini were arrested at 1 a.m. Wednesday at their home. Officers said the couple appeared high on methamphetamines....
"Everyone knows you can find just about anything you need for a low price at Walmart -- including baby stuff. But an actual baby? That's not usually part of the deal.
Unless you're desperate for cash and not in the best frame of mind.
That's the case in Salinas, California, where police say a couple tried to sell their 6-month-old baby for $25 outside the doors of a Walmart store. Now they're facing child endangerment charges.
Patrick Fousek, 38, and Samantha Tomasini, 20, were arrested Wednesday, hours after Fousek allegedly approached two women outside Walmart and asked if they'd like to purchase his child -- at the bargain price of $25. The women initially thought Fousek was joking, but when he became persistent, they got suspicious and reported it to police, Salinas police spokesman Officer Lalo Villegas said.
"They did an outstanding job and gave our officers good information." Villegas said. "I don't know if they're mothers but they definitely had that instinct to help."
Fousek and Tomasini were arrested at 1 a.m. Wednesday at their home. Officers said the couple appeared high on methamphetamines....
Wednesday, May 19, 2010
Volcker Says Time Is Running Out for U.S. to Tackle Fiscal Woes - Bloomberg.com
EXCERPTS:
May 19 (Bloomberg) -- Former Federal Reserve Chairman Paul Volcker, a top outside adviser to President Barack Obama, said time is “growing short” for the U.S. to address problems ranging from its budget deficit to Social Security obligations.
“We better get started,” the 82-year-old former central banker said in a speech yesterday in Stanford, California. “Today’s concerns may soon become tomorrow’s existential crises.”
Volcker, speaking hours after the euro fell to a four-year low against the dollar, said Europe demonstrates for the U.S. the hazards of “uncontrolled borrowing....”
“Little has happened to allay my concerns” raised five years ago that “dangerous and intractable” problems were rising in the U.S., said Volcker, chairman of the president’s Economic Recovery Advisory Board.
“Intractable not just because of the combination of complicated issues, but because there seemed to be so little willingness or capacity to do much about it,” he said during a dinner at the Stanford Institute for Economic Policy Research.
May 19 (Bloomberg) -- Former Federal Reserve Chairman Paul Volcker, a top outside adviser to President Barack Obama, said time is “growing short” for the U.S. to address problems ranging from its budget deficit to Social Security obligations.
“We better get started,” the 82-year-old former central banker said in a speech yesterday in Stanford, California. “Today’s concerns may soon become tomorrow’s existential crises.”
Volcker, speaking hours after the euro fell to a four-year low against the dollar, said Europe demonstrates for the U.S. the hazards of “uncontrolled borrowing....”
“Little has happened to allay my concerns” raised five years ago that “dangerous and intractable” problems were rising in the U.S., said Volcker, chairman of the president’s Economic Recovery Advisory Board.
“Intractable not just because of the combination of complicated issues, but because there seemed to be so little willingness or capacity to do much about it,” he said during a dinner at the Stanford Institute for Economic Policy Research.
The "time horizon" of government decision-makers
EXCERPT:
"The chance that the [Congress] will pass a budget this year is “fading,” Senate Budget Committee Chairman Kent Conrad (D-N.D.) said Tuesday.
He is pessimistic because House [members] don’t know whether they want to pass a resolution that would officially acknowledge the certainty of big deficits. House Majority Leader Steny Hoyer (D-Md.) and other Democrats have indicated that would be a tough vote in an election year.
QUESTIONS:
Think about what this excerpt suggests about the "time horizon" of government decision-makers. In the short run, who benefits from their reluctance to deal with the deficit problem? In the long run, who bears the cost?
"The chance that the [Congress] will pass a budget this year is “fading,” Senate Budget Committee Chairman Kent Conrad (D-N.D.) said Tuesday.
He is pessimistic because House [members] don’t know whether they want to pass a resolution that would officially acknowledge the certainty of big deficits. House Majority Leader Steny Hoyer (D-Md.) and other Democrats have indicated that would be a tough vote in an election year.
QUESTIONS:
Think about what this excerpt suggests about the "time horizon" of government decision-makers. In the short run, who benefits from their reluctance to deal with the deficit problem? In the long run, who bears the cost?
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