Friday, January 27, 2012

Foreign Oil

Saw this on WonkBlog the other day and was surprised. According to the EIA, over the past few years we've been producing more of our own oil and importing less:

..doesn't really square up with the criticisms you hear from the GOP about Obama blocking our domestic oil production.

It's also interesting to see where we do get our imported oil from. He's the top countries, listed by thousands of barrels imported per day in 2011 (again from the EIA):


The way you see this talked about on TV, it's easy to imagine that every dollar we spend on oil goes to Iran. I'm not at all saying our foreign oil dependence (or just plain oil dependence) isn't a problem, it's just not quite the problem we can sometimes think.

Wednesday, January 25, 2012


One of the things Obama emphasized in the SOTU today was increasing manufacturing jobs in America. You frequently hear all types of politicians and pundits talk about the importance of the manufacturing sector. It has been in decline, and many view that as the reason for widening income inequality. But is there anything special about manufacturing?

Matthew Yglesias has written a few articles about this I thought were really good, explaining how arbitrary the difference between manufacturing and services is:

if I make pasta then dry it and stick it in boxes, I'm manufacturing. If I make fresh pasta and serve it to you on a plate with my pea pesto that's services. The difference between manufacturing and services is not an ontological void between making things and not making things. It's really a gap between putting things in boxes and not putting them in boxes. Like if you build a bookshelf and ship to a store and I buy it, that's manufacturing. If I hire you to come to my house and install custom built-in shelves, that's services.

Plus, whereas people often act like our loss of manufacturing jobs is a recent phenomenon, you can see in this chart that it's been in basically the exact same steady decline since WW2 ended.

While there has been a correlation between manufacturing decline and income inequality, it seems to me that there's nothing intrinsic about manufacturing that should lead us to think that correlation is causation in this case. We need jobs and less income inequality, but I don't think that's any reason to have policies specifically favoring manufacturing.

This could turn into another topic, but I also generally don't like the idea our goal is to bring back jobs that have been outsourced. If a job is better done somewhere else; keep it there. I think that once we restore aggregate demand in our economy, the market will adjust to provide new jobs for people without policies designed to bring back the old ones.

Friday, January 20, 2012

The Founding Fathers and National Banks

This has been bothering me from a debate last week, and I never saw any talk about it. Members of the audience got to ask questions, and one guy asked Gingrich something like "The founding fathers were opposed to a national bank, thus no Federal Reserve. Who has a better grasp of what's best for our country: you or the founding fathers?" Gingrich made some comment about how he's a historian, and he knows the founding fathers know best, which is why he wants to reduce the Federal Reserve.

But.. one of the major points of disagreement amongst the founders was this very topic. The main supporters of a national bank were Washington, Adams, and Hamilton, and Washington created one. Jefferson and Madison were the main ones opposing it, but after getting elected President they ended up supporting it. So they were conflicted on the topic of a national bank, but if anything it'd be more accurate to say they mostly favored it in the end. Did Gingrich not know that? I assume he did; but why would he pretend the guy was right?

This is just one example of the weird misconceptions that are so common about the founding fathers.. acting like they were infallible mouth-pieces of God who agreed on everything and were divinely inspired to write the inerrant Constitution. In reality, they were not one thing; they were individuals who disagreed on interpreting the Constitution and on what should even be in there in the first place. It's usually meaningless to say "the founding fathers wanted ...". And if you're going to treat their beliefs like religious dogma, at least know what they really believed.

But even if they did all oppose a national bank, that guy's question is still extremely frustrating because of its implication that it'd be so unacceptable to disagree with the founding fathers who must know what's best. I'd like to know his opinion on slavery.

Tuesday, January 3, 2012

Ending Minimum Wage

The EITC and the minimum wage have the same goal: reduce poverty through higher income for people with low-paying jobs. Which makes me wonder.. why don't we figure out which one is more effective, and then get rid of the other while proportionally expanding the better one?

I'd need to be way less ignorant to say this with any certainty, but it seems like the EITC is preferable over minimum wage. The benefits can be more directly targeted to where it's needed. And its costs can be more spread out instead of specifically making it more expensive for employers to hire more people.

Of course, reality is complicated, and there may be good reasons to keep a mix instead of one over the other. But it seems strange that I never see this topic brought up in political news.