Economics

Sweet Economy Alabama

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Is the U.S. rich because it's rich because it's rich, thus obviating any worries that socialist-leaning policy change could make us poorer, as Matt Yglesias sort of argues here? The Super-Economy blog has some analysis about economic growth levels and rates worth contemplating on this point, accusing Paul Krugman of leading Yglesias astray on this point, and loaded with charts showing per capita GDP growth rates circa 1980-2008 for the U.S. and Europe, including U.S. broken down by state. Some of his conclusions:

Theory and a mass of empirical evidence show that in general, richer countries grow slower and poorer countries grow faster….

The fact that America has not only kept its advantage over Europe but also even expanded the gap is extraordinary. The US is the exception, the only country in the top five 100 years ago that is still in the GDP top five (and yes, the snide remark aside, the US in 1900 had far more pro-market institutions than Germany or France). And even the gap between the US and Western Europe has closed in the last 100 years, it only stopped converging in the 1980s.

The pattern during the last 100 years has been for countries with functioning economies to grow faster the lower they start…

I pointed out yesterday that the E.U 15 has the same per capita GDP as Alabama. Being a poor American state, Alabama grow faster than the US average between 1990-2008. In fact it grew by 1.75% per year. During the same period the EU.15 managed to grew at 1.64%. (in other words Alabama per capita earnings grew by 37%, the E.U 15 by 34%). In the same period rich Maryland grew by only 1.39%. By Krugmans "logic", Maryland should be learning from Alabama.

Alabama has the same per capita income and slightly faster growth rate as the Social Democratic EU.15, which Krugman wants us to believe is a "Dynamic" region that the US should "learn from". Has Paul Krugman ever written a column asking us to learn from the economy of Alabama? Of course not. That would be simply idiotic. Alabama is poor, and has a lower standard of living, just like the E.U 15. It only manages to grow faster than others because it starts off at such a low level (the EU doesn't even manage to do that).

The Krugman column that started the brouhaha, and Matt Welch's blogging on it yesterday.

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  1. In addition to being faster growing, we’re also handsomer and have better college football teams.

    1. I know of only one. Roll Tide!

      1. And congratulations on winning one for the SEC.

        1. Yet another one, I should’ve said.

        2. The SEC has the best players money can buy.

          1. Riiight.

          2. lemme guess. Texas or BSU.

            1. Wrong and wrong.

            2. As if Texas doesn’t have the best players “money” can buy.

          3. Not money, necessarily.

          4. Except for the fact that USC is the school that actually BUYS its players.

  2. This is what’s called an ass-raping.

    But I doubt that would discourage Krugman and Yglesias…they seem to like that sort of thing.

    1. They like to assrape or be assraped?

      1. I think it probably depends on what day it is ? is it “ass rape Monday”, “corn-holed Tuesday”.

        Check Krugman’s day planner

  3. Ah statistics! Sure the average income in Alabama is higher than the EU15 but the median is likely lower.

    Drive around any of the EU15 and then drive around Alabama. Where would you prefer to be born at random?

    1. Alabama by a wide margin.

    2. As someone originally from Alabama, I vote Alabama.

    3. Color me redneck.

      I’ll take Alabama. Roll Tide roll.

    4. Drive around any of the EU15 and then drive around Alabama. Where would you prefer to be born at random?

      Gaza.

    5. Alabama–see how close it is to Texas.

    6. The only problem with Alabama (apart from the stupid but largely unenforced sex-toy ban) is all of the University of Alabama fans who didn’t even go to college there yet refer to the university’s football team as “we”.

    7. You must have missed the Eurothread from yesterday.

    8. Alabama – they have great Mexican food there.

      Oh, and Cuban. Really.

    9. Alabama. At least I speak the language there.

  4. Would you rather live in Alabama or Gaza?

    1. Is it too late to cede Alabama to Israel?

      1. Don’t do that ? next thing you know, Texas will be lobbing in rockets

  5. Krugman is getting hammered a lot lately. Glad to see people taking him to task. Too many people put too much stock in his retarded ramblings.

  6. Krugman is getting hammered a lot lately.

    Hopefully his liver gives out right when socialized medicine kicks in and they wheel him in a dark, cold room so when can wait to die.

    1. SF, as one of the Elect he will mysteriously find his way to a facility that inexplicably has the latest equipment and a fridge full of livers.

      1. Hmm… fridge liver.

        Flappy’s favorite restaurant.

    2. He has the money to pay for whatever medical help he needs. It’s easier to throw stones from the top of the hill.

      1. It’s all Enron and Malaysian dictator money (funny how that works with socialists)

  7. Wow, that was really well done. Pure economics ownage!

  8. War Eagle, although Auburn’s only national championship in football was a few months before my birth. There always seems to be an excuse to not give AU the championship (See 1983, 1993, and 2004.).

    As another native of Alabama, I would point out that most of the people in Alabama who have low incomes would not raise their standard of living by moving, but would almost certainly raise their cost of living. Most of my relatives in AL who have much smaller incomes than I do are living at least as well as I am in NoVa.

    Remember what Friedman said when a Swede told him that there were no poor people in Sweden? Something along the lines of there are no poor Swedes in the US… .

    1. Auburn at least in the last thirty years has been better at getting close to titles (at least three or four times in the 1980s, 1993, 2004, 2006), but Alabama has been a lot better at closing the deal when they get a shot.

      1. Well, they did all they possibly could in 1993 and 2004. The rest was up to voters. When BYU was the only undefeated team in the nation, they were awarded the title despite their weak schedule. The same logic did not apply in 1993 when Auburn was the only undefeated team in the nation. Auburn went undefeated in 2004 and was not even invited to the championship game, but LSU won the national championship with two losses a few years later. Let Cass Sunstein explain that away.

  9. Would you rather live in Alabama or Gaza?

    “All things considered, I’d rather be in Philadelphia.”

    1. That’s just crazy talk

      1. I’m from Birmingham, Alabama and now live in the People’s Republic of West Philadelphia.

        Not fun being a Libertarian (since 1996, thank you) in either place, to be honest. The Bama folks thought I was left of Lenin and the Philly folks think I’m a Nazi. Selah.

        However, I must state that I think that Bama has had executive governance (under Bob Reilly) for the past 8 years that is something to admire. He was the first governor since I’ve been born that was not a complete embarrassment. I went home over the holidays and, if I were willing to do without certain cultural things in my life, I wouldn’t mind living there again. I’ll say one thing~ Alabama smells a lot better than the Northeast.

  10. I do love the econo-ownage, but Krugman wasn’t making an economic argument. He was making a “lying eyes” appeal to people who’ve been to France.

    My lying eyes, when they saw France, saw Arkansas, like I said yesterday. And today’s econo-ownage chart does show France=Arkansas, almost exactly.

    Krugman’s lying-eyes appeal was as dishonest as his economics are. It wasn’t aimed at people who’ve seen France and know how it is. It was for people who believe (or like) lies about how not-Arkansas it is.

    No one new is going to be running around saying “France is fucking Arkansas, dude; quit lyin'” just because they know it’s so, or they’ve seen a chart that demonstrates it. That’s not what this is about. It’s only about what kind of person says that, or doesn’t.

    Times readers, the kind who’d identify themselves as such, just don’t say that. It doesn’t matter what’s true. Never did.

    1. From the article I shamelessly linked to below:

      [Krugman:] “For those Americans who have visited Paris: did it look poor and backward? What about Frankfurt or London?”

      Fortunately, I am one of those Americans! What’s more, unlike most Americans who’ve traveled for business or pleasure, I’m actually a rather curious sort who likes to leave the central tourist hubs, hop on a local bus or train and occasionally go on the all-day walk to “nowhere” to discover what the rest of these cities looks like. For instance, Copenhagen is a lovely city… Provided that you stay downtown, and visit the major sights, like the Little Mermaid Sculpture (although that is apparently regularly defaced and often decapitated by vandals, as a point of fact). However, if you leave the city center, you find a very different picture… Even in the bright spots of Europe, you see people living in what (to me) are actually pretty poor and run-down conditions in comparatively middle class areas.

      So yeah, agreed. Krugman’s “best” evidence is anecdotal and even in that he fails to convince if people are actually being honest.

      1. It’s hard to believe that a Nobel Prize winner in Economics can write with a straight pen that one should believe anecdotal evidence over statistics.

        1. In the article I wrote, I break down the different points Krugman makes (as I’ve done half a dozen times before with Krugman) and explain why he’s an idiot… But the thing that really amazes me about that guy is his ability to tell a story that is 180o off of the actual information.

          He makes the claim in that article about how Europe is doing just as good as the US and then what little evidence he supplies to support this position actually makes the opposite case.

          He talks about how the rates of growth are “close”, when the numbers he cites show Europe – and not even all of Europe, just the EU15 nations that discount all the former communist countries – grew almost 1/3rd slower than the US over the last 30 years.

          And all of this is with the US being severely handicapped by 100 years of pursuing the same kinds of socialist bullshit that Europe already has in place.

  11. What surprises me is how far Switzerland has dropped based on the numbers in the post yesterday. From above America to well below. When I lived there in early 90s, I think it was close to parity with the US. Its disappointing to me that they have done so poorly since. I blame joining the UN.

  12. “I pointed out yesterday that the E.U 15 has the same per capita GDP as Alabama. Being a poor American state, Alabama grow faster than the US average between 1990-2008. In fact it grew by 1.75% per year. During the same period the EU.15 managed to grew at 1.64%. (in other words Alabama per capita earnings grew by 37%, the E.U 15 by 34%). In the same period rich Maryland grew by only 1.39%. By Krugmans “logic”, Maryland should be learning from Alabama.”

    According to the Super Economy dude’s chart, New York grew by 2.19% a year and Massachusetts by 2.32%. Maybe Maryland (and Alabama and Europe) should be learning from them, and definitely not from Alaska, at -1.21% a year.

  13. Also, I wrote about why Krugman is retarded based on his first article here: Paul Krugman’s Appeal to Mediocrity

  14. [Krugman:] “For those Americans who have visited Paris: did it look poor and backward? What about Frankfurt or London?”

    Well, he was British, but Orwell thought so

  15. C’mon now, guys, I think Krugman is just the victim of an overzealous editor. I imagine his unedited copy looked more like this:

    For those Americans who have visited the Tour d’Argent and the Georges V in Paris: did it look poor and backward? What about the Frankfurt Ritz or the St. James in London?

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  18. New York grew by 2.19% a year and Massachusetts by 2.32%

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