What evidence is there that faster internet spurs economic growth?

I like fast internet. Who doesn’t? But what evidence is there that faster internet spurs economic growth?

I wonder because the Federal Communications Commission just came out with a new plan. “It’s “a 21st century roadmap to spur economic growth and investment, create jobs, educate our children, protect our citizens and engage in our democracy,” says FCC Chairman Julius Genachowski.” Apparently faster internet is an elixir for anything that ails you.

USA ranks as low as 15th in the world in broadband adoption, threatening “America’s global competitiveness.” according to the FCC Chairman.  What evidence is there for the claim that our internet threatens our global competitiveness?  I’m not saying it couldn’t be better, but I just do see our internet as being a problem. How do people use broadband right now in the 14 countries with faster internet? What are all of the amazing things they are doing with the internet that we can’t do? Also, there are places in the U.S. that have fiber to the curb? What are the amazing things these people doing with the internet or than pirating music faster.

There is a role for the FCC to make improvements. Here are some ideas:

1. Fight against monopolies. The reason, in many cases why we have monopolies in the provision of internet is because local governments have granted monopolies to Comcast, Cox, Verizon, etc. When monopolies are created by the government, they harm consumers by limiting choice.

2. Widen the reach of mobile broadband. The FCC proposes to do with by charging fees on the channels TV broadcasts current use. Government ownership of the airwaves is the problem, not the cure. The problem with government ownership is that the government makes decisions based on politics. The FCC should propose to auction off this spectrum, not impose fees. When the spectrum is in private hands, either those of the broadcasters or other people, they will have the incentive to better utilize the spectrum. I don’t know how the spectrum will be used, but I’m sure it will be used better than it is today.

Sometimes even Mother Jones gets it right

Every once in a while environmental groups get an environmental issue right. Now if they only would have fought ethanol subsidies from the beginning, we might not have wasted billions upon billions trying to support an unsustainable industry.  Here’s the conclusion from a recent post on the Mother Jones website:

Bottom line: corn ethanol is no greener than gasoline. In fact, it’s almost certainly less green, and at the very least, there’s no urgent need for the U.S. government to pay billions of dollars to subsidize its production. Too bad Iowa is the first state on the primary calendar every four years, isn’t it?

Now if only Mother Jones would see that subsidies are wasteful—both financially and environmentally.  Then we really might be on to something. 

A perfect description of Paul Krugman

From Tom Smith:

Some might conclude from this and other missives that I am critical of Professor Krugman.  But this is not really so.  I regard him as a national treasure of sorts.  Nobody I can think of does a better job of exposing the sneering yet half-baked, the condescending yet ill-informed, the pedantic yet misguided, the professorial yet creepily unnerving, and the self-aggrandizing and deeply unappealing face of contemporary American progressivism than does the good Doktor Professor. It takes talent to inspire distrust that profound. 

Jeremy Clarkson’s pro-capitalism rant disguised as a car review

From the Times:

Of course, small retailers whine and complain when Tesco moves into the area because Tesco will nick all their business. Yes, it will, if what you are selling is expensive and rubbish.

 

That’s the core of capitalism. “Better” will always win the day. And it doesn’t matter what form “better” takes. Better can mean cheaper, more convenient, nicer, prettier, more tasty, more healthy. In some way, you have to be better than the other guy, or your kids will soon be presented with a bill for hosing you out of your sitting room.

 

Because the bosses of the giant corporations know this, they strive constantly to make what they sell better, and that’s brilliant for you and me. It’s why we don’t get punctures any more — because the tyre makers are constantly striving to be the best. It’s why your car never overheats any more — because the people who make radiator hoses are no longer stuck in the Seventies, believing they have a God-given right to keep on making radiator hoses, irrespective of how quickly they dissolve.

 

When was the last time you had a faulty cigarette? When was the last time your plane crashed? When did you last take a strawberry back to the supermarket because it was all covered in slime? It’s not governments or best-before dates or health and safety that is doing this; it’s capitalism.

 

And nowhere is the improvement seen more vividly than in the world of motoring.

 

In the olden days, car makers thought local, and that was a disaster. They really did think at British Leyland that the sun was still shining brightly on the empire and that people in Britain would always buy Rovers and Austins because they were British. We saw the same thing going on in Italy with Fiat. So what if the workforce had left its sandwiches in one of the doors and wired up the horn to the starter motor by mistake? The customer would be back. And the government would hand over a fat cheque if he wasn’t. But then capitalism went global and, all of a sudden, Terry and June could buy a car from Japan that didn’t explode every time there was a “y” in the day. So they did.

 

Then it got better. BMW worked out that if it made the X5 in America, the car could be sold more cheaply. Volkswagen thought the same about Mexico, and as Britain slithered further into the mire, we started to benefit from this as well. Toyota, Honda and Nissan didn’t come here because their executives liked our weather or the golf courses. They came because they were drawn here by capitalism, the need to be cheaper.

The freedom to innovate: wine edition

One of the reasons America has had a strong economy is because of the freedom to innovate. That freedom helped California vinters challenge the French:

Forcing taxpayers to pay for other people’s health care is not “being kinder and gentler”

Among some people there is a belief that spending tax dollars on certain program is charitable. This belief mistakenly assumes that people 1) pay taxes voluntarily and 2) the tax dollars are allocated according to people’s wishes. Both of these assumptions are wrong. Taxes are not voluntary and politicians spend money on political priorities which aren’t necessarily the same as taxpayer’s priorities.

Real charity is voluntary. It is done out of goodwill or love of humanity. Taxation is not voluntary. Only half of Americans pay income tax. And very would pay as much taxes if it were completely voluntary.

That why I get irritated when I read things like this from an economist named Uwe Reinhardt in the N.Y. Times:

The theory here is that in all modern nations, the better-off members of society would like to provide kind acts for the less well-off. The kind acts in question include financing health care for the less fortunate who cannot pay for that care with their own resources.

…

In our holiday card, my wife and I put forth the hypothesis that, for all we know, the American people are just as kind and charitable in health care as are people in Taiwan, Japan, Europe and Canada, even though it may not appear to be so in light of the demonstrated hardships we tolerate in health care for millions of families at the bottom of the income scale.

…

A tongue-in-cheek holiday card of this nature does, of course, take poetic license, so to speak, but we did try to make a serious point. Namely, thanks to the expensive and often wasteful manner in which our country’s health care providers and insurers have managed their affairs, they have helped to price kindness out of America’s soul.

Federal spending on health care is not charitable spending. Charity is when I voluntarily give my hard-earned money to causes I believe in, such as my church, fighting cancer, or give more transportation options to poor people. That is charity. Real health care charity would involve giving money to people in need, not government programs.     

Karl Rove discovers that people care about fiscal responsibility

It would have been nice if Karl Rove had discovered that people care about fiscal responsibility when he had power the ability to do something about it. Instead he only discovers it while watching President Obama demonstrate that Bush was a mere piker when it comes to fiscal irresponsibility:

Last year, Mr. Obama made fiscal restraint a constant theme of his presidential campaign. "Washington will have to tighten its belt and put off spending," he said back then, while pledging to "go through the federal budget, line by line, ending programs that we don’t need." Voters found this fiscal conservatism reassuring.

 

However, since taking office Mr. Obama pushed through a $787 billion stimulus, a $33 billion expansion of the child health program known as S-chip, a $410 billion omnibus appropriations spending bill, and an $80 billion car company bailout. He also pushed a $821 billion cap-and-trade bill through the House and is now urging Congress to pass a nearly $1 trillion health-care bill.

 

An honest appraisal of the nation’s finances would recommend dropping both of these last two priorities. But the administration has long planned to run up the federal credit card. In February, Mr. Obama’s budget plan for the next decade projected that revenues would equal about 18% of GDP while spending would jump to 24% of GDP, up from its post World War II average of 21%. Annual deficits of about 6% of GDP were projected for years to come.

 

When Mr. Obama was sworn into office the federal deficit for this year stood at $422 billion. At the end of October, it stood at $1.42 trillion. The total national debt also soared to $7.5 trillion at the end of last month, up from $6.3 trillion shortly after Inauguration Day.

No Private Sector Experience Necessary in the Obama Cabinet

This chart from a J.P. Morgan research report shows the percentage of previous private sector experience in cabinet officials over time including secretaries of State, Commerce, Treasury, Agriculture, Interior, Labor, Transportation, Energy, and Housing & Urban Development, and excludes Postmaster General, Navy, War, Health, Education & Welfare, Veterans Affairs, and Homeland Security.

It’s no wonder the administration is keen on taking over private enterprise—they have never been involved in private enterprise.

A population problem?

 Too many people or too many Malthusians?:

What this potted history of population scaremongering ought to demonstrate is this: Malthusians are always wrong about everything.

 

The extent of their wrongness cannot be overstated. They have continually claimed that too many people will lead to increased hunger and destitution, yet the precise opposite has happened: world population has risen exponentially over the past 40 years and in the same period a great many people’s living standards and life expectancies have improved enormously. Even in the Third World there has been improvement – not nearly enough, of course, but improvement nonetheless. The lesson of history seems to be that more and more people are a good thing; more and more minds to think and hands to create have made new cities, more resources, more things, and seem to have given rise to healthier and wealthier societies.

 

Yet despite this evidence, the population scaremongers always draw exactly the opposite conclusion. Never has there been a political movement that has got things so spectacularly wrong time and time again yet which keeps on rearing its ugly head and saying: ‘This time it’s definitely going to happen! This time overpopulation is definitely going to cause social and political breakdown!’

There is a reason Malthusians are always wrong. It isn’t because they’re stupid… well, it might be a little bit because they’re stupid. But more fundamentally it is because, while they present their views as fact-based and scientific, in reality they are driven by a deeply held misanthropy that continually overlooks mankind’s ability to overcome problems and create new worlds.

 

The language used to justify population scaremongering has changed dramatically over the centuries. In the time of Malthus in the eighteenth century the main concern was with the fecundity of poor people. In the early twentieth century there was a racial and eugenic streak to population-reduction arguments. Today they have adopted environmentalist language to justify their demands for population reduction.

 

The fact that the presentational arguments can change so fundamentally over time, while the core belief in ‘too many people’ remains the same, really shows that this is a prejudicial outlook in search of a social or scientific justification; it is prejudice looking around for the latest trendy ideas to clothe itself in. And that is why the population scaremongers have been wrong over and over again: because behind the new language they adopt every few decades, they are really driven by narrow-mindedness, by disdain for mankind’s breakthroughs, by wilful ignorance of humanity’s ability to shape its surroundings and its future.

Krugman to the Rescue

I wish I had written this.

It’s always impressive to see one person excel in two widely disparate activities: a first-rate mathematician who’s also a world class mountaineer, or a titan of industry who conducts symphony orchestras on the side. But sometimes I think Paul Krugman is out to top them all, by excelling in two activities that are not just disparate but diametrically opposed: economics (for which he was awarded a well-deserved Nobel Prize) and obliviousness to the lessons of economics (for which he’s been awarded a column at the New York Times).

It’s a dazzling performance. Time after time, Krugman leaves me wide-eyed with wonder at how much economics he has to forget to write those columns.

This is the work of Steven Landsburg, author of the Armchair Economist. Landsburg continues here.