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Wednesday, March 25, 2009

More on Audaciously Hopeful economics

To follow up with Glenn's simple numbers exercise I posted here, I'll share a lesson in the philosophy of big budgeting that Kevin Binversie forwarded a few days back:

Another reader remarks that "the 'Congressional Effect' is merely a modern, attenuated version of John Randolph of Roanoke's famous observation that 'No man's life, liberty or property are safe whilst the legislature is in session.'"

This second reader also offers a good observation about how our leaders prioritize their efforts:

The phenomenon you describe in this post was identified by Norman Augustine in his book ("Augustine's Laws") as "inversion": the tendency for managers to spend disproportionate amounts of time and energy on the inconsequential. He attributed this behavior to the (in)ability of most managers to comprehend the larger issues. As an example, he described a board meeting in which it was proposed to spend several millions to build a large power plant (this was back in the 1960s), a proposal quickly and uncontroversially approved. The same group then spent a much longer time, with much more vigorous debate, on the proposed expenditure of a fraction of this sum on an ancillary building to house a maintenance facility. Augustine surmised this was because (1) no one had the slightest clue as to how much a power plant should cost, but (2) everyone had an idea of how much a tool shed should cost.

(A third reader claims the correct citation is Parkinson's Law of Triviality.)

Yes, indeed, that sounds like what is going on in the Washington right now. Our nation's leaders are focused on the tool shed.

Mankiw, a Harvard prof and textbook author, notes the rise in students interested in econ.

Good luck, kids.