Hello, I'm a first best economist.

Actually, I’m not quite sure if I really am a first best economist. But I find it notable that so far no one has come forward and said “well, I’m one of them first best economists that you’ve been hearing about, what's going on here?”

Tyler Cowen has come the closest but even he thought it wise to hedge his bets (“better-than-first-best economist”). Rather the typical response has been “oh yeah, I’m definitely in the second-best camp, no question” and then “me too, I’m also with the sophisticated, nuanced, second besters!”. This of course brings out my natural contrariness and makes me want to be the first person to officially declare as a first best economist. The First First Best Economist. That way, when other first best economists come forward, if and whenever they deviate from the party line to, like, first-and-three-sevenths best economics, I will have the moral authority to give’em demerits. Of course it could just happen that I end up demeritting only myself.

As far as the substantial foundations for my claim I DO happen to think that if the world could be put on “autopilot” and the policymakers, the authorities, and the monkey that pulls the levers had to either automatically follow the directive:

a) "Do exactly what "Econ 101" tells you too!"

or the directive

b) "Assume all the potential market failures that could occur are in fact occurring! Implement Econ 340 solutions to all potential market failures immediately and simultaneously!"

I think we'd still wind up with a better world in a) than b). And that's assuming that the monkey doesn't have a lever, c), labeled "get more bananas for monkey while pretending to be doing b)" (an elaboration on Dani's third counter argument to second best economics). Which is I guess what makes me a first best economist.

Now of course economists of the >1 best school will counter that that's not a fair comparison. What they advocate is not mindless government regulation, micro overmanaging, problem fixing and excessive lever pulling. What they advocate is looking at each problem in detail and figuring things out on case by case basis, all carefully, reasonably and all. In other words that what I'm doing above is just ... GASP ... setting up a straw-man (a straw-man with perhaps a shade of truth to it. After all straw-men only work if they somewhat resemble actual humans)

Whatever could've suggested that course of action to me?

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I think I like Michael Greinecker's classification system better (and I'm sorry to drag him into this):

I think one may be able to sort economists by how much they believe in the merits of both markets and governments.

Tyler Cowen - Believes in both markets and government.

David Friedman - Believes in markets but not in government.

Joseph Stigliz - Believes in government but not in markets.

John Roemer - Believes neither in government nor in markets.

It´s hard to find a ideological pattern here.


The last sentence is particularly true. Theoretically I think I most agree with John Roemer. But he's also the person on that list that I'm the farthest from politically. I probably agree the least-theoretically-but-most-politically with Tyler (given that these are correct summations of these fine folks' views).

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Other links:
Ezra Klein
Crooked Timber
and here's a guy who definitely beat me to it but telling you that at the beginning would've ruined the, uh, aesthetic point and I would've missed the opportunity to make that stupid demerit joke above.

This guy too (thanks to Robert for pointer)

Two things related to music

1. Brian May gets a PhD in Astrophysics.

2. You might have seen this around before: Worst Album Covers. I just wanted to publicly fess up to actually owning records by one of these artists. And liking it.

Via God of The Machine.

Just so you know

Someone somewhere asked me about my own professional research, rather than the annoying crap I post here. Welp here it is;

Mexicans who wind up back in Mexico after being in US - whether through their own choice or cause they got their asses deported - earn 20% more than the Mexicans who've never been to US.

20% more. That's like the equivalent of going to college, without actually having gone to college, by just putting your little foot over the imaginary crystal frontier . This is evidence for two possible hypothesis:

1. Self-selection - it takes a lot of freakin' guts to migrate to US, there's a lot of physical hardship, not to mention the emotional costs of being separated from one's family etc. and as a result only those who think they can *make it* come here. And these are the exactly the kind of people you'd want. As that old SNL skit said:
"you got a strong back? we could use you!" (as an aside, if it's true that Mexican immigrants primarily lower the wages of the lowest skilled native workers, how come the lowest skilled native workers aren't complaining? Mostly I just see some middle class movie critics and upper class Harvard professors who have a problem with it. And folks who worry about brown people having too many children. FOP.)


2. There are human-capital-accumulation possibilities available in US that are simply not there in Mexico. The ex-migrants come back to Mexico with a lot more skills than they have left.

This is one of those things that empirically it's gonna be really hard to tell apart. Another interesting aspect of all this is that the wage premium (us wages vs. mexican wages) IS NOT the highest for the poorest parts of Mexico. An immigrant from Chiapas or Oaxaca gets a big bonus compared to what they were making back home, but once you control for education and skill level, an immigrant from Mexico City actually gets, in percentage terms, way way more.

Bottom line = American institutions + Mexican work ethic - Lazy Americans "natives" who've been here for generations = fuck you China, Europe, come over here, let me slap your around a bit. We'll own this world for a few more centuries. Because WE DON'T get crazy about immigration. We're an idea (a wonderful, wonderful idea), not a people. Franks or whatever. And you people that have been here for generations, you're getting lazy, getting spoiled, if you don't look out you'll wind up like'em Europeans over there.

Here you go, we immigrants upraciate this much more than you spoiled monkeys:

All American!