Posts tagged ‘St Louis’

Trade and Consumer Advocacy, Part 2

Yesterday, I suggested we needed a new, real consumer advocacy organization to replace the economically ignorant Nader-led PIRG organizations.  The reason is that it is time that consumers banded together and resisted Trump's protectionism, since such protection generally protects a few politically favored unions and corporations while raising prices and reducing choice for all consumers.

A couple of hours after I posted that, the absolutely indispensable Mark Perry brings us a great post on academic research about how protectionist actions nearly always cost consumers more than they help producers.

The empirical evidence above helps us to understand a very important economic lesson about international trade, call it “protectionist math” — and that mathematical reality is that the costs of protectionism imposed on American consumers in the form of higher prices and a reduction in trade will always be greater than the benefits generated for the protected industries and the workers in those industries. And here’s another part of that “protectionist math” that helps us answer the question: Sure, we can save US jobs with protectionist trade policies, but how much does it cost consumers for every job saved with protectionist trade policy, and is that cost worth it? Economic analysis and the empirical evidence presented above suggest that it’s very, very expensive to save US jobs with protectionism — more than half-a-million dollars on average per year per job in 2016 dollars (see chart above). If Trump enacts protectionist policies that save $50,000 per year US factory jobs but at a cost to consumer of $500,000 annually for each job saved, that’s a surefire formula to “Make America Expensive and Poor Again,” not “great again.”

I won't reprint his chart, but he has detailed results form a number of academic studies in different industries that back this statement up.

My point about needing a new consumer advocacy group was a little tongue in cheek, but here is Perry quoting from a study at the Federal Reserve Bank of St Louis a number of years ago (back during the last wave of protectionism, which was based on Japan rather than China bashing).

The primary reason for these costly protectionist policies relies on a public choice argument. The desire to influence trade policy arises from the fact that trade policy changes benefit some groups, while harming others. Consumers are harmed by protectionist legislation; however, ignorance, small individual costs, and the high costs of organizing consumers prevent the consumers from being an effective force. On the other hand, workers and other resource owners in an industry are more likely to be effective politically because of their relative ease of organizing and their individually large and easy-to-identify benefits. Politicians interested in re-election will most likely respond to the demands for protectionist legislation of such an interest group.

Why Peyton Manning is an Icon

I friend sent me a note analyzing data on NFL quarterbacks past and present, and came up with this top five based on a points system that ranked the top 40 all time quarterbacks on a number of dimensions, such that the lowest score is the best:

1. Joe Montana - 54 Points
1. Tom Brady - 54 Points
3. John Elway - 68 Points
4. Terry Bradshaw - 84 Points
5. Peyton Manning - 86 Points
Even without going through the numbers, I can live with this.  The conundrum is that Peyton feels to many, including me, like he may be the greatest of all time, but nearly any numerical or scientific analysis puts him behind other quarterbacks, including Tom Brady.  So why do our hearts tell us something else?  I have two hypotheses:
  1.  He is the most interesting guy in the history of the NFL before the ball is snapped.  This is a criteria I never would have thought even existed 10 years ago.  But Peyton has made watching the team at the line of scrimmage before the play starts totally compelling.  No one in history is even close.   Think of all the great quarterbacks in history -- you think of them throwing, right?  With Montana, for example, I see those slants to Jerry Rice, hitting him in stride.  Now, how do you picture Peyton?  Yelling Omaha at the line of scrimmage.
  2.  He is money in advertisements and live appearances (e.g. Saturnday Night Live).  Have you seen Joe Montana's and Farvre's ads?  Stiff.  How much better would Peyton have been in There's Something About Mary?  Only Bradshaw is close.

Peyton gets dinged for being a poor bad-weather quarterback.  I am not sure if the numbers support this hypothesis, but he would have to go a long way to being worse than Aikman was.  I was in Dallas during their three Aikman-era superbowls (actually I lived in Denver for their 2, and St Louis for theirs, and Arizona for theirs, all of which is payback for growing up an Oiler fan).   Aikman always disappointed in bad weather.  The one year of their four year run in the 90's that they did not go to the Superbowl, they lost to SF in the Conference championships.  That day, the moment I saw it was raining, I knew the Cowboys were doomed.