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Archive for February, 2014

Latin America Rising

February 25, 2014 Leave a comment

Move over, Venezuela, Argentina and Brazil. Mercosur and Andean: there’s a new kid on the block:

Amid all the bad news in the region, the presidents of Chile, Colombia, Mexico, and Peru met with little fanfare in Cartagena last week to seal an economic pact launched in 2012. They call their project the Pacific Alliance, and it will soon include Costa Rica and possibly several other countries. The four founding members are the most successful economies in Latin America; they boast the region’s highest economic-growth rates and lowest inflation rates. Together, they represent 36 percent of the region’s economy, 50 percent of its international trade, and 41 percent of all incoming foreign investment. If the Alliance were a country, it would be the world’s eighth-largest economy and seventh-largest exporter. Its members lead the lists of the most competitive economies in Latin America and those where it’s easiest to do business. Given that trade among the four countries is currently a mere 4 percent of their total trade, the potential to expand trade and investment flows is huge.

This is not only good news for these countries. It may well help reverse the direction of economic policy in Venezuela.

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Where Does Your Intelligence Come From?

February 24, 2014 Leave a comment

A new study says it’s in your genes.

Well, not exactly:

…the genetic variation identified in this study only accounts for an estimated 0.5 per cent of the total variation in intelligence.

What Will You Regret?

February 21, 2014 Leave a comment

Note that “party more” didn’t make it into the top choices of students who were asked “what they wish they’d done differently in college.”

Categories: Education

The Effects of Government Price Controls, Part 3

February 20, 2014 Leave a comment

I’m not quite sure why those in favor of a minimum wage increase don’t see it as a form of government price controls.

I don’t doubt that they have their heart in the right place. And there’s some evidence that, at least in the short-term, increases in the minimum wage don’t have the same effect as other government price controls. Demand for unskilled labor is almost certainly less elastic than demand for, say, television sets.

But it is a form of price control, and the expected effects shouldn’t be surprising:

Once fully implemented in the second half of 2016, the $10.10 option would reduce total employment by about 500,000 workers, or 0.3 percent, CBO projects…

The Effects of Government Price Controls, Part 2

February 19, 2014 Leave a comment

It looks like Argentina is looking to, um, a neighboring country to the north for economic models to follow. Good luck with that.

A day after reporting the highest inflation in over a decade, Argentina’s government fined several retail chains, including France’sCarrefour SA and U.S.-based Wal-Mart Stores Inc., for failing to stock certain price- capped products.

Commerce Secretary Augusto Costa said, in a presentation to reporters, the government fined Carrefour about $ 167,000 and Wal-Mart around $77,500. The companies were allegedly found to have an incomplete stock of certain products that they agreed to sell at capped prices. Changomas, also owned by Wal-Mart, was fined about $41,000. Other local retail firms were also fined.

Once again, government officials show they lack a basic understanding of economics, and the result hurts the very people it intended to help.

The Effects of Government Price Controls

February 18, 2014 Leave a comment

You could have seen it coming, with just a freshman education in economics:

In the serene private clubs of Caracas, there is no milk, and the hiss of the cappuccino machine has fallen silent. In the slums, the lights go out every few days, or the water stops running. In the grocery stores, both state-run shops and expensive delicatessens, customers barter information: I saw soap here, that store has rice today. The oil engineers have emigrated to Calgary, the soap opera stars fled to Mexico and Colombia.

To Be Critical, Not Just Lazy and Skeptical, Do the Math

February 17, 2014 Leave a comment

critical thinking

Many students confuse thinking critically with thinking skeptically.

They are not the same.

Blind, reflexive skepticism is not critical thinking at all. In fact, in some ways, it’s the opposite of critical thinking: instead of taking an argument seriously, you just reject it because you “can’t be fooled” or because you “don’t believe anyone or anything.”

Students can often gain better insight into the thinking behind an article or story by using some basic analytic skills.

For example, this article on enrollments in Obamacare:

Another strong month of sign-ups in new health insurance policies created under President Barack Obama’s health care law pushed Illinois’ total enrollment to 88,602 through Feb. 1, bringing the state on target with initial federal projections.

Nationwide, more than 1.1 million Americans selected a private plan in the past month, bringing the total number enrolled in coverage since the marketplaces opened in October to nearly 3.3 million, according to federal data released Wednesday….

Despite the surge of sign-ups, the disastrous launch of the Affordable Care Act’s open-enrollment period in October leaves the nationwide figures short of the administration’s goal to have 4.4 million people signed up by the end of January, according to a September Department of Health and Human Services memo.

There are plenty of numbers to work with here. How does the journalist get from a fact–“strong month of sign-ups…pushed Illinois’ total enrollment to 88,602”–to an interpretation–“bringing the state on target with initial federal projections”?

The target of 4.4 million is a straightforward fact, too. The numbers of U.S. states is, as well: 50. Just for fun, divide 4.4 million by 50….voila, you get 88,000. That’s awfully close to the number of Illinois enrollments.

But. The population of Illinois is not 1/50th (2%) of the U.S. It’s about 13 million. The U.S. population is 313 million. That makes Illinois 4%, not 2%, of the U.S. population. And 4% of 4.4 million projected enrollments is 176,000–twice the total Illinois enrollments. Illinois is definitely not “on target.”

The reporter–in the first paragraph of the story–got the facts right but didn’t do good basic analysis to interpret the facts. He should have written something like, “Illinois is still running at just half the projected enrollments projected by the administration by the end of January, even after a relatively strong month.”

The Chicago Tribune is a fine newspaper and this reporter is probably smart and professional.

All the more reason to think critically when you read things that sound authoritative. Don’t dismiss them outright. But check the math, at least.

(Hat tip to James Taranto’s Best of the Web.)