Regression to the mean
5 months ago


Regular commenter Prateek Sanjay notes that he's also enjoyed all my Lovecraft posts this year. These posts have definitely added some diversity to F&OST readers and commenters. You can find all of them (at least the ones I bothered to tag - which should be most of them) here.
One of the most interesting points that Dorman makes is connecting this argument to the work of Janos Kornai. I first encountered Kornai in the way that I think most people did - as a critic of planned economies in a discussion of comparative economic systems. What a lot of people forget is exactly what Kornai's criticism of planned economies was - the idea was actually not that central planners regularly make disastrous "market process" calculation mistakes (to borrow an Austrian phrase) - it was that planners deliberately underpriced their goods. Central planners, Kornai argued, are price-setters whereas market economy firms are almost always quantity setters and price takers. The result was the socialist "shortage economy" - and the flip side is that the market economy is a "surplus economy". That's not that bad of a problem to have, of course! In all my concerns about demand deficiency, you never see me saying "man - we'd all just be better off under central planning", after all. But it does shed light on the economic problems we do face, which is overproductionism/underconsumptionism to put it crudely - and employment as a function of effective demand to put it a little more respectably.
So last week at the very end of South Park, BP unleashed Cthulu from the Gulf of Mexico. A nice little homage there. Tonight's episode was full-blown Lovecraft. Unfortunately, no video is available just yet. Cthulu is on a rampage, lots of South Park residents are in the cult of Cthulu, and Cartman is trying to endear himself to the Great Old One to help seek revenge on his friends, who kicked him out of their super hero club.

It was a beautiful fall day yesterday in Northern Virginia, and I was couped up all morning at my mother-in-laws scraping and painting, so in the afternoon we decided to take a walk to the bookstore.

Daniel Kuehn is a doctoral candidate and adjunct professor in the Economics Department at American University. He has a master's degree in public policy from George Washington University.