Ruralites Are People, Too

A job candidate at work presented his paper, which details a government program that attempted to revitalize rural areas in the '90s. Some tactics included improving transportation, offering tax incentives for firms to open factories in rural areas, and so forth.

Such programs give me pause to beginning with, but my feelings were cemented once the speaker mentioned that they generally discourage job training. This is because job training helps people build skills and human capital, thus empowering them to move elsewhere for better prospects elsewhere, leaving the area even more impoverished.

Rural areas have no inherent right to exist, and discouraging their residents from improving themselves seems absurd. We don't want to help rural areas for their own sake; we want to help them because of the impoverished people who live there. And if these people feel that they are making themselves better off by choosing to move somewhere else, more power to them.

Can Per Capita Growth Be Bad?

It can, if it's the result of more poor people dying.

I came across this observation from the book "From Subsistence to Exchange":

Again, if many poor people survive longer in an LDC [less developed country], this depresses per capita incomes and leads to what is habitually termed a worsening income distribution, both within the particular country and relative to richer countries. Conversely, if more of the poor die or a society reverts to subsistence production, this brings about more equal incomes within a country, accompanied by a rise in per capita incomes in the former case and a decline in the latter case.

Am I a Baseball Keynesian?

The blog Bayes Ball cites my post among several theories attempting to explain the recent trend of perfect games. He then conducts a careful analysis using the Poisson distribution, which is perfect for studying events that are extremely rare (in this case, perfect games) but have many, many chances of occurring (there are thousands of regular season games each year). His analysis shows that a season with two perfect games is well within reason.

After reading the post, I had a few protests. For instance, if Jim Joyce gets the call right, we'd have three perfect games this year, and the Poisson analysis goes out the window.

Even if we let Joyce's call stand, I speculated that a season with three games in which the pitcher gets the first 26 batters out would still be exceedingly rare by historical standards, and we'd have to start questioning the assumption that the dominance of pitching relative to hitting hasn't changed much in the past few decades.

In my previous post, I argued that the string of perfect games in fact did demonstrate a change in favor of pitching. I even suggested that baseball should change its rules (like adjusting the height of the mound or the dimensions of the strike zone) to restore the historical rates of success and failure between batters and pitchers.

But after a while, I was forced to wonder: What if I had spotted a trend where there wasn't one? What if I had advocated that we fix a problem that doesn't exist?

There is a connection to macroeconomic policy. To keep the economy on track between the undesirable extremes of too much unemployment or too much inflation, the federal government often modifies monetary policy (such as changes to the interest rates) or fiscal policy (such as changes to taxation and government spending).

The chief advocate of such tools was John Maynard Keynes, who is regarded as a hero among most economists but whose theories are generally dismissed among the George Mason economics faculty and students.

One has to wonder how often we are tempted to implement macroeconomic policy changes in response to economic news that might just be the result of statistical fluctuation. Perhaps action is occasionally warranted to rebalance both baseball and the economy, but we should think twice before moving in the fences and allowing each batter five strikes, or introducing stimulus programs and holding down interest rates.