Friday, August 17, 2012

Reach for the rose-colored glasses

Political campaigns, especially presidential elections, can be depressing.  Robert Barro recently cited the astounding level of economic ignorance that both presidential candidates had embraced (in the WSJ):
The level of economic commentary during the presidential campaign has not been high. Democrats have accused Mitt Romney of the crime of shipping jobs abroad while at Bain Capital, and Mr. Romney has responded by denying the charge. No one takes the economically appropriate position for a job outsourcer: "Yes, I shipped some jobs abroad to save money, and this choice was correct not only for my company but also for the U.S. economy."

Outsourcing is essentially the same as importing a good from a foreign country. In the former, a company buys foreign labor services. In the latter, a company buys the good that embodies foreign inputs, particularly labor services. So, it makes no sense to be a free trader with respect to imports and exports of goods while opposing outsourcing. Opposing either is protectionism.

The central issue is why free trade is attractive. ...
One day later, Jerry Brown (LA Times Aug 15) showed why state-level campaigns are not much better as he plugged for a California tax hike ballot measure.
Flanked by education and labor leaders, dozens of schoolchildren and his dog, Sutter, Gov. Jerry Brown formally kicked off his campaign Wednesday for Proposition 30, the measure on the November ballot that would raise taxes on state sales and incomes of more than $250,000.

Brown used a Sacramento high school as the backdrop for the event, calling Proposition 30 a choice about whether Californians want to provide more funding for schools. In vintage Brown style, he quoted from the New Testament to make his pitch to voters, urging them to ask the state’s wealthiest residents to pay higher taxes to boost education spending.

“To those who much has been given, much will be required,” he said quoting from the Gospel of Luke, saying the state’s highest earners “now have an opportunity to give back.”
There are, of course, an uncountable number of similar examples. Tuning out is tempting but we live in a world where politicians matter. They influence huge chunks of GDP and much more.

But I always reach for the rose-colored glasses.  Dean Stansel pointed me to his "An Economic Freedom Index for U.S. Metropolitan Areas."  There is apparently significant variability (and choice) at this level of geography.  Half of the twenty lowest-ranked metro areas are in California.  Eleven of the twenty top-ranked ("freest") areas are in Florida.