Puero y Asociados
May 23, 2006
Let me introduce you to Kiva and the world of microfinance in the developing world. It is the story of Matthew and Jessica Flannery who are true believers in the power of small business development to change the lives of the poor.
The Flannerys claim that half the world’s population live on less than $2 a day. Most of these people live in developing countries and are self-employed. Microfinance provides financial services to those excluded from the formal financial system and team with microcredit/microloan programs to effectively boost the income-producing capabilities of small businesses run by the self-employed poor.
Now let me introduce you to Boris Puero Candela, proprietor of Puero Y Asociados in Guayaquil, Ecuador. Boris’s small business repairs computers and helps his clients connect to the Internet. He is seeking a $1,200 loan to add an employee and expand his business. Through Kiva and their microfinance partner MIFEX, $850 has been raised from online investors, including myself. The other day I sent along $100 to help make up the loan, which is to be repaid over 12-16 months. I hope to receive progress reports when the loan is granted, and I’ll pass along what I learn.
Dave, hoping this is all that it appears to be.
Economists to Politicos:
May 17, 2006
That economists and politicians view the world through a different set of glasses is not surprising, and immigration is a good example of how different those views are.
Marginal Revolution: Open Letter on Immigration
Immigrants do not take American jobs. The American economy can create as many jobs as there are workers willing to work so long as labor markets remain free, flexible and open to all workers on an equal basis.
How many of us believe that simple declaration? To the economist (and to me) the working of a free labor market is self-evident and easily demonstrated. To our elected officials it is counter-intuitive, so they take the popular position that immigration threatens American jobs. But job availability is not a zero-sum game where there are only so many jobs and a job taken by an immigrant necessarily means one less job for American workers. A free and healthy economy will indeed create as many jobs as there are workers available.
Dave, still fascinated with the way economies work.
Immigration mess
May 15, 2006
President Bush speaks on immigration tonight. I fear that we will hear mostly silly political posturing, but I’m ready to be surprised. While we wait, this article has some interesting things to say about the situation.
If the President wants us to believe he’s finally heard our demands for a secure border, he won’t waste the entire speech talking about “jobs Americans won’t do” — a crock if there ever was one. It’s “wages Americans won’t pay” that creates a market for illegal labor in the first place. He won’t waste time cadging support for amnesty by telling us how illegal immigrants are good-hearted people who just want to feed their families. By that measure, if I steal a car in order to go to work to feed my family, not only should I be forgiven, but allowed to keep the car.
This is an essential point: The reason that good people enter the country illegally is essentially economic. The American employer needing low-skill labor has two choices. He can either purchase that labor at a price that will attract American workers, or he can offer to pay wages that are too low to attract American labor but very attractive to Mexican laborers who find it difficult to support their families under the current economy at home.
Is the root cause of illegal immigration really that simple? I think it is. Does this suggest an easy solution to the problem of what to do about the myriad of illegals already in the country and being productive? Unfortunately, no. I hope that the President will offer some fresh ideas tonight.
Dave, always optimistic.
Quick: Is economic exploitation good or bad?
May 9, 2006
If your economic education is influenced by what you hear from many pulpits, your knee-jerk answer to the question will likely be that exploitation is a bad thing.
Kruse Kronicle: When Exploitation is Mutually Beneficial
None of this is to downplay the fact that conditions of life in poor countries are positively awful compared to our own. The point is to emphasize that the surest way to bring these countries up to more tolerable standards of living is through free trade, the process by which the capitalist exploits the worker and the worker exploits the capitalist. To the extent that poverty still exists on our planet, it is due to insufficient exploitation. The only way to defeat absolute poverty is by greater productivity, and that means leaving people free to engage in mutually beneficial exploitation. More, and faster please.
OK, now let me ask the question again. You may not be quite ready to affirm that “more and faster” exploitation is an unalloyed Good Thing, but I submit that Kruse’s argument bears some thought.
The article reminds me of what I have been reading about the exploitation of Latino ball players by Major League Baseball. Is the deliberate cultivation of players in Latin America mere flexing of economic muscle by rapacious club owners, or is it mutually beneficial to player and owner alike? What do you think?
Dave, thinking that at least it is better for the fans.
Ethanol madness
May 8, 2006
As petrol prices rise, policymakers and venture capitalists are suddenly embracing funky alternatives. Will the fad last?
In a word; no.
Alternative energy | Canola and soya to the rescue | Economist.com
When oilman George Bush calls for more research into ethenol and biodiesel, you know that the beltway disease has struck again. Panic on the Potomac.
Growing corn to be used as a fuel additive just doesn’t compute with me. Of course, corn processed through beef cattle to satisfy our appetite for steak also jams my mental CPU. Since I don’t grow row crops for a living, I can assert with impunity that market forces will do a better job of maximizing the economic output of use of land than Government planning. On the other hand, I am only one generation away from the farm, which means that I still harbor suspicions that I really don’t know what I’m talking about on agriculture matters. Most of our congresspersons are not so hindered.
The linked article seems to do a good job of summing up the American dilemma.
The notion of American farmers defying the tide of capitalism to grow their own fuel is a glorious delusion. But … Congress has some big decisions to make about biofuels. To what extent, if any, should government subsidise this nascent industry? Already it has received plenty of help. Ethanol producers get a tax credit worth 51 cents a gallon, much to the delight of industry powerhouses such as Archer Daniels Midland. There is also a 54 cents-a-gallon tariff on imports of ethanol from Brazil. Starting with the removal of that tariff, Congress needs to rethink its wrong-headed energy policies. Nathanael Greene, of the Natural Resources Defence Council, argues that the federal government’s most important immediate step should be to enact a loan guarantee to create America’s first cellulosic ethanol plant, which would probably be built in Idaho.
Dave, still wondering whether biofuels are good or bad for us.
Congress Gone Wild
April 29, 2006
More on April madness in congress from the online Wall Street Journal.
But forgive us for talking about actual substance. Like college kids on spring break, Congress is letting it all hang out in a political bender of a kind we haven’t seen in years. This is what happens when a President is at 36% job approval, and there is no Beltway chaperone. And to think there are still six long months until Election Day.
Dave, speechless.
Give More Money to Iran
April 29, 2006
Economist Arnold King has this to say about a Reuters story on the new Republican plan to soften the blow at the gas pump.
EconLog, Senate Republicans: Give More Money to Iran, Arnold Kling: Library of Economics and Liberty
So…for every gallon of gas we consume at the market-clearing price, we will pay less in taxes, leaving more to go into Iran’s pockets. And if that does not help our friends overseas enough, we’ll raise taxes on our own oil companies, so they won’t drill so much.
I wish we could suspend the Senate until September 30.
And so do I. The sight of politics overruling good sense is not a pretty one.
Dave, busy burning his Republican credentials.
Gasoline and Government
April 27, 2006
Whoever it was that said that we usually get the government we deserve is proved right by the panic in Washington over $3-plus pump prices.
Gas prices rise, and suddenly everyone in Washington becomes a raging anti-capitalist. (Washington D.C., that is — the other Washington already has more than its fair share.) Outrage over the audacity of oil companies daring to make money is something you expect to hear from a hippie at a Left-wing anti-everything rally, not the leadership of the greatest capitalist nation on Earth. The shock comes upon hearing the same rhetoric coming from both sides of the aisle.
I’ve said it before, and survived, so I’ll say it again. The only way to reduce our country’s energy dependence is to price it until it hurts and we are forced to change out habits. The hurt will be borne by those least able to suffer it, but blame the Government, not the oil companies.
Yet another example of unwarranted government interference is the forced reliance on ethanol. The energy bill Congress passed last year should have simply ordered the use of oxygenated blends, and allowed the market to figure out which worked best in different areas. Instead, the ethanol lobbyists did their job well. Politicians promoted and protected ethanol use, while refusing to protect manufacturers of rival additive MTBE from lawsuits. (Both are carcinogens, but it would cost more to clean MTBE from water supplies in event of a spill.) The coastal states were forced to switch to ethanol, which is expensive to make and hard to ship, and works well only in the Midwest, where supply lines are short. It turned out that domestic ethanol manufacturers couldn’t keep up with the demand, so we have to use imported ethanol — and imported ethanol carries a 54-cent tariff on every gallon.
One almost gets the idea that our politicos don’t really care about the economic impact of their largesse. Here in the middle of corn country, most people think that subsidizing ethenol production is a good thing, which means that most people aren’t thinking at all, just responding to sound bites on the evening news.
How did I get in this biting, cynical, mood?
Dave, retired, acknowledged greedy capitalist.
Don’t Worry, Be Happy — Or Else
April 19, 2006
The science of happiness. What nonsense! And the Government should help us be happy? Like the IRS has done?
TCS Daily - Don’t Worry, Be Happy — Or Else
With research into subjective well-being, economists are making statements about what constitutes the good life. In doing so, we are encroaching on territory once claimed by philosophers and theologians — and, more recently, by self-help gurus. In the 70’s, it was I’m OK, You’re OK. Now, we are saying “I have positive net affect, you have positive net affect.”
…
Still, I have a feeling that if happiness research proceeds far enough, it will serve merely to rediscover some eternal truths. For example, this New York Times story cites work by Claudia Senik, who found that “that when people aspire to a better quality of life within the next 12 months, the attempt to reach that goal alone — the anticipation independent of the outcome — seems to bestow happiness in the present.” Have the sages not been telling us this for centuries?Meanwhile, it may be too early to proclaim that “science” is going to inform government policy to lead us down the path to a good life. We have had many false starts with “science” in the past. Consider “scientific socialism” or the psychological “science” of Freud or of B.F. Skinner. The “science” of subjective well-being may be another chimera.
This is the result of the prevalent secular worldview. For now, I will simply suggest that a Christian worldview deals with mysteries like happiness (and unhappiness) in a much more satisfying and intellectually honest way. One of these days I’ll no doubt have more to say about that.
Dave, happy as a clam.
Those pesky gold bugs
April 17, 2006
I consider myself just a distant kissin’ cousin to the real gold bugs, but I confess that I have a smidgen of the yellow stuff tucked away somewhere just in case. Now, after years of obscurity, gold is again getting some respect. Or at least some press.
The bugs are back | Economist.com
AFTER some two decades of misery, it is only fair that gold bugs should enjoy themselves. Enthusiasts for the shiny, yellow, metal are delighted that gold futures passed $600 a troy ounce on Tuesday, April 11th, up by 16% so far this year. Adjusted for inflation, this price may still be nowhere near the highs producers once enjoyed. To match the peak, when the spot price hit $850 in 1980, gold would yet have to rise to about $2,200 in today’s money. But the bugs have excuse enough to cheer.
The article points out that it is not at all clear exactly why the price of gold is again rising but concludes that the the upward price trend is likely to be with us for a while. I morbidly reflect that the peak prices may come just in time for me not to enjoy them.
Dave, always ready to enjoy himself while he can.
