Thursday, January 05, 2006
Speaking of New Year's resolutions...
#2: This year I will be unequivocal in my support of free trade. I am going to stop bashing the Chinese for offering bargains to American consumers. I am going to ask the Bush administration to revoke the textile quotas so Americans will find it easier to clothe their families. I am going to vote to repeal the antidumping laws, which only protect powerful domestic industries from foreign competition. I am going to admit that unilateral disarmament in the trade wars would make the U.S. a richer nation....
#3: This year I will ask farmers to accept the free market. While I believe the government should provide a safety net for the truly needy, taxpayers shouldn't have to finance handouts to farmers, many of whom are wealthy. Farmers should meet the market test as much as anyone else. I will vote to repeal all federal subsidies to growers of corn, wheat, cotton, soybeans and rice. I will vote to allow unrestricted import of sugar. (See resolution no. 2.) I will tell Americans that eliminating our farm subsidies should not be a "concession" made in trade negotiations but a policy change that we affirmatively embrace.
Re point #2: If you could chose between the likes of China, India and Mexico being relatively wealthy and middle class or poor, which would you choose? Re point #3: Jeffersonian romanticism notwithstanding, why are farmers any different than any other small manufacturer? Other than as a political matter deriving from the structure of the Senate, why do we care more about farmers than other small businessmen?
Mankiw doesn't get it all right. His resolution #6 offends me in my capacity as a numismatist:
#6: This year I will vote to eliminate the penny. The purpose of the monetary system is to facilitate exchange, but I have to acknowledge that the penny no longer serves that purpose. When people start leaving a monetary unit at the cash register for the next customer, the unit is too small to be useful. I know that some people will be upset when their favorite aphorisms become anachronistic, but a nickel saved is also a nickel earned.
Or, as my grandmother -- allegedly the only economics major in the class of '22 at Vassar College -- taught me at a very early age: "A nickel is all a dollar can earn in a year." (Which, by the way, explains why I believe that capital creates wealth, rather than labor -- I am certain she never said "a nickel is all a poor person can earn in minute".)
4 Comments:
By 
Lanky_Bastard, at
Thu Jan 05, 09:48:00 AM:
There are valid policy reasons to subsidize food production...I mean look how fired up people get when oil demand closes on supply...imagine if that were food. That having been said, the subsidies are probably excessive, and there is no reason at all to have subsidies on cotton, tobacco, or any other non-food crop.
By 
, at
Thu Jan 05, 01:57:00 PM:
This year I will vote to eliminate the penny. The purpose of the monetary system is to facilitate exchange, but I have to acknowledge that the penny no longer serves that purpose. When people start leaving a monetary unit at the cash register for the next customer, the unit is too small to be useful.
I've heard this "monetary lint" argument before. My standard response: If the penny is eliminated, won't that just make the nickel the new "monetary lint?" And then the dime, the quarter etc. as the coin before it is eliminated? If this reasoning is carried to its logical conclusion, eventually no one will be carrying anything smaller than a bunch of $100 bills.
By jeff, at
Thu Jan 05, 04:05:00 PM:
We had no problems dealing without pennies in Germany (the PX/Commisary doesn't use them). In fact, it was a bit annoying to get them from the Post Office...
And yeah, food supply is the reason farmers are lifted to a higher place in the pantheon. But you keep hearing about (obviously non-farming) celebrities making bundles off this program... and I'd like to see sugar prices drop to where Pepsi will replace corn syrup with it!
By TigerHawk, at
Thu Jan 05, 09:37:00 PM:
Back in te '70s, when commodity prices were high all around, the intrinsic value of the copper embedded in the one cent piece briefly exceeded one cent. It wasn't by enough, though, to be worth the trouble, so there was no big penny melt (as there had been with pre- 1964 silver coins). Still, the concern was sufficient that in 1982 the composition of the coin was changed to 97.6% zinc and 2.4% copper. Zinc was and is a lot cheaper than copper.
There are, obviously, a great many pre-1982 cents in circulation, which is pretty powerful evidence that it remains uneconomical to melt down even copper cents.
