A New Year's Message
What are you still doing here? Go have fun!!!
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December 2007 Archives
December 31, 2007
Masters of the obvious
In the field of expensively produced reports "scientifically proving" something that everyone already knew, the 1989 NHTSA report on "Sudden Acceleration Incidents", as chronicled by PJ O'Rourke, clearly stands out as the leader:
In the twinkling of an eye (by the standards of bureaucratic time, which is slower tan geologic time but more expensive than time spend with Madame Claude's grils in Paris) the thing was done. On March 7, 1989, the DOT-NHTSA-ODI-TSC-OPSAD-VRTC (you'd think the initials alone would be enough to slow down any rnaway cars) effort produced an eighty-one page report written by an eight-man group of engineering savants with more than fifty years of college among them. This document presented evidence from exhaustive experiment and analysis that proved what everybody who understands how to open the hood of a car had known all along about SAIs: "Pedal misapplications are the likely cause of these incidents."Yes, the dumb buggers stepped on the gas instead of the brake . . . the truth was out at last. The government had released a huge report showing that there was no such thing as unintended acceleration in automobiles. Stand by for huge government reports on fairies stealing children and poker wealth gained by drawing to inside straights. Meanwhile cars did not fly away of their own accord. They could be safely left unattended. You can fold up the camp cot and quit spending nights in the garage keeping an eye on the family minivan.
However, it now has some competition:
Children who play sports video games on the Nintendo Wii burn more calories than they would playing regular video games, but not as many than if they played the actual sports, a new study shows.
Drinking problem? I don't have a drinking problem. I drink. I get drunk. I fall down. No problem!
In honor of your New Years celebrations, I offer you this classic on drinking:
Things that make you go hmmmm
The Economist's Certain Ideas of Europe blog notes the boom in year-round operation of bar terraces, supported by outdoor space heaters, that tends to follow smoking bans. This has certainly been the case in DC. But what about global warming?
. . . these outdoor terrace heaters (which have also sprung up like topsy all over Brussels in the last couple of years) are not exactly a brilliant idea, environmentally. The gas ones may be prettily designed with little silver hats to reflect the heat downwards, but they still amount to sticking a bunch of large propane cylinders on the pavement, lighting them, and letting them heat the sky. The electric ones are surely equally wasteful, aren't they?It is all rather a poser. This blogger, as a selfish non-smoker, confesses to finding bars and pubs in places like Britain much more pleasant since smoking was banned in them. Yet a headlong rush to more and more outdoor heating cannot be a bright idea, either.
How long before the first city council bans smoking in outside bars?
The only safe flight is no flight at all
Alex Massie considers the latest bit of lunacy from the TSA and remarks:
For the love of god... When will these clowns learn that the only way to ensure total security is to prevent people from getting on the plane in the first place?
Please . . . don't give them any ideas.
Mental models of immigration
Glen Whitman ponders the difference between my preferences and Kerry Howley's on immigration:
I won’t weigh in on the topic itself, fascinating though it is. I’m more interested in trying to parse why they disagree. One interpretation of Kerry vs. Megan is that they differ in their preference ordering. Kerry’s preferences look like this:{more legal immigration}whereas Megan’s, apparently, look like this:
pref {guest-worker program}
pref {status quo}{more legal immigration}That is, Kerry and Megan would both ideally like to see expanded legal immigration, but since that’s a political dead letter, they are consulting their second preferences. Their second preferences differ, because Megan thinks the negative consequences of a guest-worker program are bad enough to make it worse than the status quo.
pref {status quo}
pref {guest-worker program}.
But here’s an alternative interpretation of Kerry vs. Megan: They have the same preferences (both consider a guest-worker program superior to the status quo, as in the first ordering above),but they have different political strategies. Kerry, thinking that expanded immigration is not going to happen, pushes her second preference for a guest-worker program. Megan, thinking expanded immigration might still be in the cards, opposes a guest-worker program because it could siphon support from the superior alternative.
(Clearly, it’s Megan’s position that I’m less clear about.
Economists have a tendency to represent simple verbal things in more complicated jargon, in part because this is occasionally clarifying, and in part because it is fun. And hell, it's New Years Eve, so I can't resist trying my own model.
Let's suppose a simple model where there are five classes of people: foreigners, illegal immigrants, guest workers, permanent legal immigrants, and Americans. Represent them by the letters f, g, i, l and a. Assume that for each there is a population P, with one interesting variable dimension, W. Take as stylized facts that:
Wa > Wl > Wg > Wi > Wf
and population growth is exogenous to American migration flows so that global population can be simply represented by the following equation:
Pf = Pworld - (Pa + Pl + Pg + Pi)
Global welfare will then be described by the equation:
Wworld = PaWa + PlWl +PiWi + PgWg + PfWf
Right now, for our purposes, Pg = 0. Kerry would like to see it increased to much greater than 0. I would like it to stay 0.
Glenn is right, I think, that for both of us the first preference is a scenario in which legal immigration is increased, so that in twenty years, our population and culture have been enriched by hordes of assimilated foreigners merrily remitting financial and human capital back to their home countries:
| Wa | + | Pa | + |
| Wl | + | Pl | + |
| Wg | No change | Pg | No change |
| Wi | No change | Pi | - |
| Wf | + | Pf | - |
But since this is politically infeasible, Kerry turns to a guest-worker program as second-best. Here, I think, is Kerry's mental model of what happens with a guest worker program:
| Wa | No change | Pa | No change |
| Wl | No change | Pl | No change |
| Wg | No change | Pg | + |
| Wi | No change | Pi | - |
| Wf | + | Pf | - |
This, obviously, represents an unambiguous Pareto improvement, especially since we both anticipate that current American immigration policy will make Pi fall no matter what we do about guest workers; indeed, I think Kerry views guest worker programs as a possible way to alleviate anti-illegal sentiment.
My mental model, however, extends over multiple time periods. In time period one, you import a large number of guest workers who impose adjustment costs on their neighbors, including other immigrants with whom they compete for resources. In time period two, those guest workers go home and are supposed to be replaced by new guest workers. However, the frictional costs of those guest workers has increased opposition to both legal immigration, and the guest worker program. So in time period 1, things look like this:
| Wa | - | Pa | No change |
| Wl | - | Pl | No change |
| Wg | No change | Pg | + |
| Wi | - | Pi | No change |
| Wf | + | Pf | - |
In period two, one of two things happens (possibly both): there are significant changes in the law and our institutions in order to better contain guest workers; or the guest worker program and the legal immigration program are curtailed in order to appease rising anti-immigration sentiment. I fear an outcome like this:
| Wa | - | Pa | - |
| Wl | - | Pl | - |
| Wg | No change | Pg | - |
| Wi | - | Pi | - |
| Wf | No change | Pf | + |
In other words, I'm not holding out for some awesome future that both Kerry and I would probably agree is first best, but would probably also agree is not currently politically feasible. I'm against guest worker programs because I think it is possible to do much worse than the status quo, and that guest worker programs will probably reduce American welfare, immigrant welfare, and the total number of foreigners represented by (Pl + Pg + Pi).
Obviously, I don't think that P=1 for my scenario. But it doesn't have to be all that close to one for guest worker programs to start looking a lot less attractive.
New Year's Resolutions
Rather than grimly commit to self-improvement, a friend and I had a glass of wine on Saturday night and considered the things we actually want to do in the New Year. The list so far:
- Write a book
- Reconnect with at least five people I haven't seen in years
- Concede that my rock-climbing days are over
- More house parties, fewer mediocre restaurants
- Wear nothing that doesn't make me feel wonderful--even if I have to wear the same damn outfit every day
- Visit at least one country I've never been to before
- Take singing lessons
With Lent coming up fast, I'm also toying with the idea of going vegan this year. What are y'all planning for 2008?
Your Ron Paul moment of the day
Guitarist John Meyer argues with the guy from the Apple commercial about Ron Paul
December 29, 2007
And while I'm building my wish list . . .
In general, I try to assume that when someone does something professionally, they have some passing familiarity with the subject. This prevents me from looking like an utter fool when I triumphantly catch, say, a science journalist in some "error" that turns out to be my own misunderstanding.
In fact, I have caught professional economists and journalists in errors, sometimes embarassing ones; and in turn, I have been caught in a few bloopers of my own. But the flood of silliness in my comments from people who do not know what they are talking about, and do not know that they do not know, has to stop.
For the record, I have read the Austrian works to which I am being referred. The thing is, I have also read some other books about economics. This is clearly not true of the commenters who make basic errors such as calling me a Keynesian, thereby demonstrating that they have no idea who John Maynard Keynes was, or what he said. Approximately the only thing that Baron Keynes and I agree upon is that in the long run, we will all be dead. And not very long, if I keep having to respond to such silliness.
I wish . . .
That Ron Paul supporters would stop informing me, in ALL CAPS, that various current policies are UNCONSTITUTIONAL, when in fact those very things were WRITTEN INTO THE CONSTITUTION via the AMENDMENT PROCESS. The FOUNDING FATHERS deliberately gave future legislators the ability to AMEND the constitution, because they wisely assumed that in the FUTURE there might be circumstances they were unable to FORESEE in 1787. Whatever you may think of the income tax, it is not only constitutional, but actually in the constitution, via this very clear amendment:
The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration.
The complaints that I don't know what I'm talking about would be more convincing if the people making them gave evidence of having actually read the document that they claim validates their most dearly held beliefs.
December 28, 2007
Ron Paul's Economic Policy, Part Two: Alternative Currencies
I agree that the Treasury's crusade against the Liberty Dollar is stupid and should be halted. I don't agree that you have a right to hold commodities without paying capital gains taxes, nor that the US government should accept taxes in multiple currencies. The exigencies of the law mean that the government is always going to specify tax rates in one currency, which means that anyone who wants to use an alternative currency is going to accept currency risk. And given that taxes are 20% of GDP, most people are not going to be willing to accept that currency risk.
Which is why, while I agree that the government should leave the damn Liberty Dollar people alone, I don't agree that this matters. The gold standard is an idea whose time has gone.
Ron Paul on taxes
A number of readers want me to really dive into Ron Paul's economic policies and explain why I don't like them. Okay, here goes. First up: one of the main areas in which I am supposed to agree with Dr. Paul. That is to say, taxes.
Most of Dr. Paul's supporters like the fact that he wants to cut taxes. I like the fact that he wants to cut taxes. But how he plans to cut taxes is not so good. In fact, it's pretty bad.
His website is full of talk about eliminating the income tax, which is not going to happen. His more realistic plans consist mostly of about eighty zillion tax credits, either to replace existing government spending, or to make a warm gesture towards interest groups Dr. Paul thinks are swell, like senior citizens and people serving in the active duty military.
Item one: there is no good reason to replace spending with tax credits. Economically, they are indistinguishable from spending, except that they add all sorts of ugly behavioral inefficiencies.
Item two: they are regressive. Dr. Paul has several plans to replace spending programs with tax credits, which would represent a massive fiscal redistribution away from people who can't do much with a $15,000 tax credit because they do not have $15,000 worth of taxable income.
Item three: tax credits are economically inefficient, for reasons that I once laid out at great length here.
Item four: tax credits are economically distortionary; they either pay people to do things that they were going to do anyway, or they encourage people to do things that won't pay for themselves.
Item five: tax credits are much beloved of politicians because they sound magically different from spending, which allows them to distribute goodies to their supporters. If nothing else, this should make any libertarian shudder at the thought of tax credits.
And how will he pay for this tax cuttery? Megan's First Fiscal Law: spending is taxation. Economically, it doesn't seem to make much difference whether you finance that spending with taxation or debt; both exert some economic drag, though the mechanisms are different. If you want to cut taxes, you have to cut spending.
Actually, Dr Paul says he agrees with this. So how come his website and collected "issues" writing reveal no major cuts to any programs except his scheme to eliminate the department of education? I mean, I'm all for getting rid of the School Nannies. But observe, please, this graph which I am shamelessly ripping off of Marginal Revolution:
Note, please the category "everything else" which comprises under 17% of the budget. The Department of Education disappears into there, along with transportation, farm subsidies, and everything that is not entitlement spending, defense, and interest on the national debt.
Perhaps he is planning to slash military spending? But then who is going to perform all this border enforcement? And I don't actually see where he's planning to make the military smaller; he's just planning to keep them home. Iraq is expensive, but it's not expensive enough to pay for the kind of tax cuttery he's proposing. You'd have to cut the defense budget by a third to produce a 5% reduction in the overall budget.
Entitlements are by far the largest part of our budget; if you're serious about cutting spending, you need to get serious about attacking entitlements. But Dr. Paul makes no mention of slashing Social Security, Medicare, or Medicaid, and for good reason: the senior lobby would slaughter him. In fact, he's not only going to leave Social Security benefits intact, but also, he's planning to eliminate taxation of Social Security benefits. His plan for dealing with the entitlement problem seems to consist of saying that we should keep the federal government from spending the "trust funds". Okay, Dr.; into what financial assets should the government invest this trust funds, and what taxes will you raise, or spending will you cut, in order to plug the several-hundred-billion-dollar hole this will open in the general fund?
Nor are seniors the only ones he plans to cut taxes on. His ideas include no taxes for active duty military, tax credits for health care, tax credits for paying property taxes . . . apparently, the only people Dr. Paul thinks should pay taxes are, well, me, a young urban worker who doesn't own a home.
He promises to veto new spending. But new discretionary spending is simply not the major driver of our budget. The major driver of our budget is entitlements, which will grow unchecked even if he, and Congress, adjourn to play golf for the next eight years. This is not economically serious, fiscally responsible policy; in fact, it's just another variant on what everyone else is doing, which is ignoring the entitlement programs that are about to turn into the sucking chest wound of the US budget.
Finally, he sells his fiscal policy with completely unnecessary, not to mention factually deceptive, immigrant-and-trade bashing. His brief on the Import-Export Bank, an FDR-era boondoggle of trivial significance to anything, including the US taxpayer, is positioned as a complaint that we are massively subsidizing China. In fact, the subsidy is tiny, and it's not aimed at foreigners. We lend poor credit risks in other countries money to buy US goods; it's an export subsidy, and a particularly stupid one that should be eliminated--without gratuitous fearmongering about China.
Similarly, he attacks the Social Security Administration's plan for a "totalization" agreement with Mexico, claiming that it will result in the American taxpayer, suddenly and for no apparent reason, sending a ton of money to Mexicans who work here for a little while and then go back to Mexico in order to loll around in the sun collecting their Social Security checks.
This sounds ludicrous because it's a gross distortion. Totalization agreements are standard practice between countries with social security systems; they prevent people who are working abroad, but planning to retire in their own country, from having to make contributions to two systems. We have totalization agreements with any number of countries, and the actuaries at the SSA expect that the agreement with Mexico will have little impact either way on the trust funds. Indeed, the agreement with Mexico will cost us much less than our agreement with that nation of mooching scabs, the Canadians.
In short, I do not look at this list of proposals and see a bold iconoclast who finally dares to transcend politics, fearlessly doing what needs to be done and speaking truth to power. I see a politician telling his supporters what they want to hear, which is that they deserve to pay lower taxes, but not to have any program that is important to them slashed. I see him scoring cheap campaign points off of American hostility to foreigners, particularly poor foreigners who compete with them economically. And I see him, like everyone else, dodging the major fiscal challenge of our time: the problem of paying for the health care and pensions of the retiring baby boomers.
Why shouldn't we punish rich people who renounce their citizenship?
We're not the Soviet Union, that's why. A society should offer a good enough deal to all of its members, even the rich ones, that they do not want to leave. If it cannot do that, it should let them pursue happiness somewhere else.
If someone wants to renounce their citizenship for any reason, good riddance to them and don't let the doorknob hit them in the ass on the way out. You don't have a right to their property to fund your government, a right of which they are "depriving" you by leaving. Taxes are the bill one pays for membership in the society. If one declines membership, one doesn't owe the taxes. The princes of Saudi Arabia are very rich, and much of their money was earned selling products to Americans. Do they owe us taxes too?
That kind of punitive taxation is, like the draft, an attempt to compel a civic emotion which cannot be manufactured by any external power. Like the draft, it increases quantity at incalculable cost to quality. The American idea is that you are not an American because you were born here; you're an American because you want to be. If people do not want to be Americans, then we are better off without them.
Taxation and the right of exit
The Economist's Free Exchange writes that many higher-earning Danes are voting on its tax regime . . . with their feet:
None of this is to say that the strains of commitment in Denmark have imperiled its stability in the near term. But as the low-tax, high-growth EU entrants from the east close in on the west, competition for both human and financial capital will intensify, drawing away ever more well-educated, cosmopolitan Danes-- unless they are given sufficient incentive to stay put. In effect, free migration within Europe allows wealthier Danes to bargain to keep a greater portion of their earnings. The interesting question is how hard they will bargain.
The numbers don't seem that large, but they come out of Denmark's most valuable human capital; the immigrants flowing the other way tend to be much lower skilled.
It is hard for high levels of taxation to survive a right of exit; Europe has mostly been protected (so far) by its many languages, which make it harder to move. But as the EU increases labor mobility, expect to hear more about harmful tax competition. Or more American-style efforts to keep the citizenry from moving abroad to work1.
1 In case you didn't know, America, alone among developed countries, taxes the foriegn earnings of its expatriates. Also alone among developed countries, it holds you liable for taxes ten years after you renounce your citizenship, and confiscates your property if it determines that you have renounced your citizenship for the purposes of tax avoidance.
Filibusted
Kriston asks:
Why on earth don't majority Democrats hand minority Republicans telephone books and tell them to start actually filibustering? It is only a gentleman's agreement that invests the threat of a filibuster with the full weight of an actual filibuster. So long as Republicans choose to turn every vote into a 60-vote cloture issue, Democrats might as well require them to own up to the mechanism that makes this obstructionism possible. At zero cost the Republicans can currently threaten filibuster on any legislation that comes down the pike; at the cost of reading from the encyclopedia all night long, some of these threats will surely be proven to be bluffs. Better yet, an intractable press will have to take notice when Republicans are forced to make a circus display of torpedoing popular legislation. Also, what the Democrats are doing now isn't working: Popular legislation is not passing and Democrats are being tagged "ineffective."
Many Republicans asked this very question when the Democrats were the ones doing the filibustering. The answer, as I understand it, is that if you make the opposition stay and actually talk, you (or a fraction of your majority) have to stay and actually listen. The spectacle is entertaining, but everyone would rather be home in bed, so they "let's not and say we did" became the order of the day."
Incidentally, is anyone else amused by the lightening speed with which filibustering has gone from [undemocratic obstructionism/a vital institution for protecting minority interests] to [an important tool for preserving Federalism/an obscene mechanism for thwarting the clear Will of the People]? No one's even bothered to come up with a better fig leaf than "but it's different when my guys are in charge!
December 27, 2007
Passage of the day
From Doing our Own Thing, by John McWhorter:
Language is exactly like singing and dancing. Printing and the spread of literacy happen to have created a First World in which the written version of language infuses our very souls, in a way that musical transcription only does for a few, and dance transcription for even fewer. But properly speaking, that is a historical accident. The capacity for language that we are, most likely, genetically specified for is an oral one. Just as we have no genetic endowment for driving, although many of us do it daily, we have no genetic endowment for reading (which in fact damages our eyes) or writing (which is hard on the hands and, on keyboards, now gives millions carpal-tunnel problems).In fact, most of the 6,000 languages in the world remain, for all intents and purposes, exclusively oral in their usage. Of course by now most of them have been transcribed onto paper in some way--brief word lists in some cases, longer word lists and short grammatical descriptions in many others. For hundreds of languages there are these plus, say, Bible translations and some transcriptions of folktales. But even in these cases, the very sight of the language on the printed page is something of a novelty for its speakers, commonly evoking a certain marvel and gratitude. For them, the language remains fundamentally oral, used causally at home or with friends. They rarely read it, especially since there is so little to be read--no newspapers, magazines, or novels. How deeply can a word list permeate daily life? Few of even us speakers of written languages are given to curling up with a dictionary and a cup of hot cocoa on a blustery night. Speakers of oral languages commonly use one of the world's "big" languages for reading and writing.
But these "Berlitz" languages are very much the exception among the 6,000 Only about two hundred languages are regularly taught in writing to children, and only about half of them are represented by piles of works on a wide range of subjects to the extent that we could say that they have a literature. For most of the languages in the world, if you learn it, it'd better be in order to talk to its speakers, a lot--because there's barely anything to read. Language is talked. If it's written, that's just an accident.
Is it really true that we've no genetic facility for reading? How come some kids learn to read so much faster than others, then?
Anyway, the book is fascinating so far. Highly recommended.
Who cheated whom?
Nobel-prizewinning economist Gary Becker writes this week about the subprime bubble. He ably punctures the notion that the bankers were all a bunch of evil cheaters:
Many economists and members of Congress have claimed that the housing crisis was greatly magnified because unqualified home buyers with limited incomes and assets were not fully aware of the terms of their mortgage loans, such as that the low initial (teaser) interest rates were only temporary. This belief in the beneficial effects of greater knowledge about mortgage terms is inconsistent with the evidence that the most sophisticated banks and investment companies, including Merrill Lynch, Citibank, and Morgan Stanley, have written down their housing investments by billions of dollars. No one can reasonably claim that these banks lacked the skills and knowledge to evaluate all the terms of, or the likelihood of repayment, on the subprime and other mortgages that they originated or held as assets. The losses to investors have been so large, and have so eroded their capital base, that some of the major investment companies have needed large infusions of capital from Middle Eastern and Asian Sovereign Funds (see our discussion of these funds on December 10th).Although there was some fraud by mortgage lenders and by borrowers, fraud was not the main reason why so many subprime mortgages were issued. Otherwise savvy investors greatly undervalued the risks associated with many of the mortgage-backed securities that they held. They and borrowers alike did not fully appreciate that interest rates were likely to increase from their unusually low levels, and that many borrowers lacked the financial means to meet their mortgage repayment obligations at higher rates, and sometimes even at the low initial rates they had received.
Given the low interest rate lending atmosphere of the past few years, it is highly unlikely that borrowers would have turned down the mortgages they received if they had much better information about terms, or that lenders would have been more reluctant to originate or hold these mortgage assets if they had better information about the credit and other circumstances of borrowers. This is why I doubt that the rules proposed this week by the Federal Reserve to require lenders to get more information about borrowers, and to provide more information to borrowers about the terms of mortgage loans, would have been effective in warding off this crisis, or will be effective in preventing future crises.
He goes on to point out that the same people criticizing banks for issuing loans to people in marginal neighborhoods with inadequate credit were, several years ago, some of the loudest voices raised against "redlining"--that is to say, the practice of refusing to issue loans to people living in marginal neighborhoods with inadequate credit1. But I want to focus on this point.
The housing bubble was a great national folie-a-deux. Buyers and lenders alike were deluded by long years of easy credit into thinking that risks were lower than they actually were. It is not plausible to argue that the banks knew the loans would go bad . . . and nonetheless jammed billions of them into their portfolios.
To many people, of course, this cries out for regulations to keep the bankers from being stupid: force them to up their loan quality. This is likely to just replace one kind of error with another. Most people who got subprime loans are not in default, and I will be very, very surprised if the number of defaulters even gets near the 50% mark. Why would we want to cut off credit to the sensible majority who can meet their payments, in order to protect those who take out loans they can't afford? There is no way to tell Class A from Class B--or believe me, the banks would already have weeded the latter group out.
It is characteristic of major economic problems that whatever problem you're having now seems like the only problem worth solving, no matter what the cost. But the cost of denying credit to millions of people is very high--and tellingly, it will not be borne by any of the people who are advocating it.
1 But why does the quality of the neighborhood matter, I hear you cry? Because when housing booms end, the marginal neighborhoods experience the fastest and deepest declines in home values. That means that a lot more people in those neighborhoods end up "upside down" on their mortgages: the value of the loan exceeds the value of the home. That means that they can't get out of a tight spot by refinancing, or selling; even if they sell, they owe the bank money, meaning they have to declare bankruptcy.
Seriously, though
The New York Times' willingness to believe that Ron Paul is a Nazi-lover seems like a symptom of a general willingness to believe that people with extreme political views that you disagree with all hang out together in some big club, where they exchange tips on stamping out liberty, and recipes for Molotov cocktails . Memo to the right: the greens do not hang out with the Maoists1. Memo to the left: the Nazis and the anarcho-capitalists hate each other with a passion seldom found outside a faculty compensation committee meeting. It should be rather obvious from listening to Dr. Paul that he's no crypto-fascist. Now if you'll excuse me, I have to go research Dennis Kucinich's links to the Shining Path.
1 Though to be fair, this is partly because no one wants to go to dinner with vegans except other vegans.
Ooops
Ron Paul: not a Nazi. I'm slightly bemused by the fact that the Nazis are so eager to claim Ron Paul as one of their own. I mean, not that Ron Paul isn't a perfectly nice guy, and so forth, but isn't claiming that you're friends with famous people who've never met you something you're supposed to grow out of in high school?
On second thought, I suppose a Nazi is definitionally someone who never grew out of anything in high schoool.
Why are citizenship and working bundled?
In re guest workers, Kerry responds:
Citizenships are club memberships you happen to be born with. Some clubs, like the Norway club, have truly awesome benefits. Others, like the Malawi club, offer next to none. Membership in each club is kept limited by club members, who understandably worry about the drain on resources that new members might represent. Wishing the U.S. would extend more memberships in 2008 isn’t going to get you very far.Conceptually, for whatever reason, most of us are in a place where we think labor market access and citizenships ought to be bundled. A Malawian can’t come work here, we think, without the promise of a club membership, which is nearly impossible to get. This is an incredibly damaging assumption for two reasons: (1) memberships are essentially fixed in wealthy democratic societies (2) uneven labor market access is a major cause of global inequality. Decoupling the two leads to massive gains, as we see in Singapore, without the need to up memberships.
Question: what's the difference between outsourcing and immigration? To an economist, perhaps not much; they both cause relative adjustments in some wages while producing gains from trade. To the rest of us, however, there are large and noticeable differences. Immigrants produce substantial externalities, positive and negative, in the communities they inhabit. Citizenship doesn't come bundled with the right to work for American companies; it comes bundled with the right to work for American companies here. And it does so for the very good reason that one's neighbors have a very large impact on one's life. We may some day transcend geography, but right now we're all very much locked to a small patch of earth, and the people who happen to be inhabiting the patches next to us.
I am of the opinion that the positive externalities outweigh the negative ones, particularly when we consider, as I believe we should, the benefits to the migrants. But there are ways to amplify the negative externalities, and setting up a program that explicitly prevents assimilation seems like a big one. So does setting up a program which, in order to actually make it work as promised, would require massive changes to American institutions such as gender discrimination laws.
I don't think that most supporters of guest worker programs actually envision them working as promised; I think they anticipate substantial leakage from the program, rather than anticipating that we will, say, suddenly start discriminating against female immigrants. Probably they're right. But I get hopping mad every time I see a politician lowballing the cost of his latest healthcare boondoggle, so I don't feel entitled to work similar tricks on people I disagree with. And in the long run, I don't think it will work. Programs sold on exaggerated promises, like the Medicare subscription drug benefit, survive because they create their own constituency against changing them back. But if this program works as advertised, its major beneficiaries won't ever be able to vote.
The un-dorsement
I'm digging the undorsement trend, at least when it's as well done as it has been by Daniel Drezner:
On the other hand, Matthew Yglesias and the Concord Monitor are onto something with the "undorsement" idea. So, my two undorsements of candidates that could ostensibly win are.... John Edwards and Rudy Giuliani.My reasons for the Giuliani undorsement have been made clear.
As for Edwards -- I can't take seriously anyone who thinks that a free trade agreement with Peru -- Peru!! -- is somehow going to devastate workers and communities. Proposing to "make top prosecutors at the Department of Justice responsible for enforcing trade agreements"? I love how Edwards wants to re-engage with the world and simultaneously bully these governments into accepting American terms. Hillary Clinton's trade positions are problematic, but Edwards is Hillary on steroids.
I second that emotion.
Ron Paul: Why ask why?
Why harp on Ron Paul? ask my interlocutors. Do I hate liberty? Do I not realize that he's the closest thing there is to a libertarian candidate?
Well, for one thing, there's not much point in my arguing with a John Edwards supporter.
"But he's a demagoguing populist who wants to gut trade, jam taxes sky high, and spend the money on a ludicrous state-run health care program!" I cry.
"I know! Isn't it marvelous?" they reply, and that's the end of the discussion.
In fact, I will, in the run-up to Iowa, be digging into the economic policies of all of the major candidates, and presenting my thoughts for your delectation. Ron Paul is up first for two reasons: first, because so many people seem convinced that he ought to make my heart go pitter-pat; and second, because the nuttiness extremity of his policies makes for interesting discussion.
There's really very little variation between most of the candidates this election; we're mostly arguing about dry bureaucratic tweaks to the same fundamentally wrong-headed policies advocated by everyone. Ron Paul, on the other hand, has an entirely different set of fundamentally wrong-headed policies, which makes him slightly more amusing to talk about. Ron Paul is the master of high-concept politics: he's full of simple prescriptions that can be stated in a sentence or less. Thus we waste little time getting tangled up in subtleties.
Anyway, why not just bite the bullet and support him, imperfect as he is? I did as much for the execrable George Bush in 2004, after all. Well, actually, you just answered your own question; I've overlooked disturbing tendencies in a candidate before, with less than salutory results. George Bush supported low taxes, a semi-decent entitlement reform, etc., etc. It's just that little of that stuff happened, and a lot of bad stuff did.
The fact that Ron Paul doesn't want to do those bad things, but instead advocates an entirely different group of bad ideas, like abolishing the Federal Reserve and pulling every American solider back behind our borders, doesn't comfort me. Nor does the fact that Congress will stop him, since Congress will stop him from doing nearly all the things I like, such as reforming Social Security--just as they stopped George Bush from doing the things I liked. They won't stop him from refusing to negotiate new trade deals, and doing his best to scupper the ones we've got, for example. Nor will they likely block him on immigration. And I'm pretty sure they can't keep us from whisking all of our troops home from everywhere tomorrow, which sounds fun in a bold, sweeping sort of way--but I am inherently suspicious of bold, sweeping changes to our foreign policy.
All of which is irrelevant because if Ron Paul somehow did garner the Republican nomination, the only tangible result would be a Goldwater-style landslide.
Department of irrelevent but interesting questions
There are interesting side-speculations about what might have happened to America had we not fought the Civil War which do not concern themselves with slavery and race. They don't get much air play, because they're pretty much totally irrelevant to the question of whether we should have fought; but they're still kind of fascinating. For example, what would trade policy have looked like if the Confederacy had left us?
One of the big issues between North and South, after all, was the level of the tariff. The north wanted high tariffs, to protect its industries from competition; the south wanted low tariffs so that its farmers could buy cheap manufactures. Had we not reconstructed them into the Union, we would have lost the major constituency for free trade in Congress.
Good, fast, cheap: pick two
Texan Kriston Capps has a few interesting observations about the death penalty in Texas:
A study performed by Cornell University in 2004 found that Texas assigns the death penalty at a rate lower than the national average (2 percent versus 2.5 percent). The most death penalty-prone states were not Texas or Florida, but rather Oklahoma (6 percent) and Nevada (5.1 percent). In part this rate disparity owes to Texas's sentencing standards. In order for the death penalty to be assigned, a crime must meet certain objective criteria (scroll down). For example, when a police officer or firefighter is murdered, when a child under age 6 is murdered, or in the case of multiple murders. Subjective criteria—the "heinousness" of a crime, for example—are not considered. Texas's sentencing standards are those that tend to find sympathy among even moderate opponents of the death penalty.The speed with which the state carries out capital punishment, however, finds no quarter among sensible observers. Both the Texas Court of Criminal Appeals and the Texas Fifth Circuit are prosecutorially oriented; a state prosecutor explained to me today that there are no defense lawyers serving on the Court of Criminal Appeals at all. The speed of the system is aggressive, as critics point out, and is certainly out of step with the current national mood. (Indicators of which include the so-called national moratorium—although it is no such thing. The Supreme Court has merely stayed every execution by way of lethal injection that has come across its desk. A formal SCOTUS moratorium would have delayed the hasty execution of Michael Richard; the "de facto" moratorium did not.)
The Times: "The death penalty developments that have dominated the news in recent months are unlikely to have anything like the enduring consequences of Texas' vigorous commitment to capital punishment." True for the convicts put to death, of course; true for the families of their victims, I would imagine. In other respects, this is a dramatic statement. The state's execution of executions is impressive and awful, the product of a pervasive political problem that inflects the justice system. Its devotion to the death penalty, however, is truly average.
The prosecutorial bias is much more disturbing than the fact that Texas has the death penalty, even though I'm against the death penalty. Spending your entire life behind bars isn't so much better than dying; we should be focused less on the small number of executions, and more on the biases in the system that lead to wrongful convictions of all kinds. And sadly, Texas isn't really unique in this regard, either.
Benazir Bhutto killed in a bomb blast
Benazir Bhutto has been assassinated at a political rally, along with at least 15 others. I have nothing interesting or original to say on the topic, so I won't strain for something. However, I'm surprised at how harsh BBC World News has been. For now, BBC America has suspended regular programming for the news broadcast, and the interviewee they just had on isn't waiting for the body to get cold.
If you're looking for some background on Pakistan, you can't do better than our October article, and the follow-up web-only interview. The Economist also has a short backgrounder with links to articles.
Alas, poor Card
I just got back from Western New York, driving back to DC with my sister. She's a science fiction buff, and we listened to Orson Scott Card's Empire all the way down. Since I'd just read Peter Suderman's review of the book in the New Atlantis, I was interested to see what I'd think.
I'm afraid I agree with Mr Suderman: the book is dreadful. I'm an enormous fan of Card's, but there are some things no love can survive, and this book is one of those things. The book's premise of a plot to start a new American civil war is stupid. Card is phoning it in--apparently from somewhere with a very poor signal--and does nothing to make the story more believable. Characters this thin cannot be described with the traditional "paper" or "tissue"; they seem to be composed of some sort of special alloy fabricated to be exactly one molecule thick. Worse, they're not even entertaining. Stock fictional characters, well done, can provide hours of fluffy entertainment; these mostly bore one with ill-conceived sermons on politics and family life.
What if?
The other question about the Confederacy, of course, is what would have happened if they had managed to abolish slavery fairly early on. I suppose one could construct some sort of "blowback" argument whereby American intervention hardened racial attitudes and made white Southerners act nastier to blacks than they otherwise would have been . . . . but such an argument would be hilariously unconvincing.
It is hard to imagine a Confederacy with a Civil Rights Act. School segregation probably have been less of a problem; I doubt there would have been too many schools for black kids. Legal discrimination would be buttressed with the sort of social and economic discrimination that America (read, the North) legally prosecuted for decades. Confederate apartheid, unlike the the African version, commanded the support of actual majorities of the population in most places, so even if you gave blacks the vote, it's not clear to me how it would have ended.
Isn't there another way?
I periodically flirt with isolationism, or if you prefer, "non-intervention". Like most libertarians, I'm attracted to "high concept" political philosophy: simple rules that can be stated in a sentence or less. No arguments about causus belli, blowback, or ultimately unknowable political ramifications; just a simple "yes or no" test. Did a foreign army invade the United States? For "Yes", press one; for "No", press two, and go back to arguing about what should replace child welfare laws in the coming anarcho-capitalist society.
Besides, all the foreigners hate having us there. Why not leave, and see if absence makes the heart grow fonder? (I suspect that many nations which have come, over long decades, to regard regional peace as some sort of natural law, will get a rather nasty surprise. This might make our influence look, in retrospect, rather appealing.)
But anyone who thinks at all seriously about libertarianism will, fairly early on, be faced with a very high hurdle. There are a handful of wars in which American intervention unambiguously halted gross abuses of human liberty. World War II is one, though many end up going around, rather than over . . . arguing that the Nazis were the direct result of American intervention in World War I; or that it was justified because Japan attacked us1; or that Russia and Britain would have defeated Hitler anyway2. The American Civil War, however, is by far the highest leap; and the hardest to dodge.
In theory, every state has the right to secede, and the stated Federal rationale for the Civil War--preserving the union--was the vilest tyranny. In practice, chattel slavery was a barbarism even viler.
And so we killed 20-30% of the Confederate Army, not a few of our own, and uncounted numbers of civilians. That's not counting the wounded, who probably outnumbered the dead. All we managed to achieve, at this horrendous cost, was a corrupt and brutal occupation, followed by the "freedom" of Jim Crow, sharecropping, and "separate but equal". And it was worth it. The good guys won. We didn't do everything we wanted to, or even everything we could have, or should have. Jim Crow was putrid. But it was nonetheless so much better than slavery that it was worth the horrendous cost--in my opinion, and that of almost everyone in the world.
Hard-core non-interventionist policy doesn't have a very good model for this--at least not one that I've seen. Either the states didn't have a right to secede; or we had right to invade a sovereign nation and occupy them in order to end slavery; or you have to leap the hurdle and say "Yup, we should have left the South alone". Some libertarians do say this, and not because they're racists; the price of intellectual consistency is embracing occasional bad results. I think this is wrong, for all sorts of reasons, but I do understand the allure of consistency. Because if you don't take their position, then suddenly you no longer have a high concept policy, full of hard-and-fast rules that could be applied by any literate twelve-year old. Suddenly you're mired in arguments about which practices merit intervention, and which are merely offensive, and how much of our own national interest we are obliged to sacrifice in these sorts of humanitarian efforts.
Thus non-interventionists fairly often end up in debates over what would have happened if we'd just let the Confederacy go. Jim Henley's post on the topic is interesting and very thoughtful, but like most of these arguments, it seems to me too willing to embrace the comfortable belief that intervention never achieves any substantial positive effect. I am very suspicious of any model which validates someone's policy preferences by proving that there are absolutely no tradeoffs. This is what drives me crazy about the supply-siders: rather than facing the implications of what they advocate, they resort to fairy-tale scenarios in which all the problems magically disappear. One occasionally stumbles across Pareto improvements in the policy world, but they are rarer than hens' teeth.
It is true that slavery was on decline in the developed west in the late 19th century, but that story, at least as I understand it, is rather complicated. Britain and Spain abolished slavery in far-off colonies; it was not economically important to most voters. The numbers involved were comparatively small, relative to the British Empire's population; something less than a million, compared to 4 million slaves in the American South. In Britain, slavery's economic importance was declining as industrial production replaced agricultural commodity trade as the economy's main engine of growth. In Brazil, too, it was a relatively weak institution, declining due to competition from foreign labor. In Russia, the serfs were not quite equivalent to chattel slaves, and in any case, there too, they were freed under the aegis of an absolute monarch who wanted to modernize the economy.
But in the American South, slavery was still a vital and thriving economic institution at the time of the Civil War, as economic historian Robert Fogel has shown in his brilliant Time on the Cross. Would it have been eliminated quickly? Even if it had declined economically, would the Confederacy have gotten rid of an institution that was central to its foundation?
I think it's rather more plausible to believe that a breaking away would have strengthened the institution. For one thing, an independent Confederacy could have relegalized the slave trade, outlawed since 1808. (This might well have had the side effect of extending slavery elsewhere, as Confederate-supported slave trade brought new sources of cheap supply to areas where immigrants were making slavery uncompetitive.) For another, I think Jim is massively overestimating the number of slaves who escaped; estimates I've seen put the number of runaways at about 1,200 a year, out of a population of 4 million. That's even with the basically non-existent enforcement of the Fugitive Slave Act. Escaping turns out to be very difficult when you need a travel permit to be anywhere more than a few miles from your house, as any Russian defector can attest.
It's hard to imagine any scenario in which more than a handful of blacks ended up in the north; the slaves mostly didn't escape, and if they'd been free, it seems doubtful that we would have allowed them to immigrate in massive numbers. The best case scenario seems to be 4 million blacks nominally free but subject to a more vicious version of Jim Crow, unmoderated by the safety valve of northern migration.
That slavery would have ended, eventually, is probably true. But how "eventually"? Obviously, if slavery would have ended in 1862, then our invasion was counterproductive; on the other hand, if they had just managed to get rid of it last year, I imagine that most people, probably even Mr Henley, would vote in favor of a retrospective invasion. But how about 1900--would it have been better to leave another two generations of blacks under the lash? What about 1920? 1950? How many generations of suffering are enough to justify intervention? No evil lasts forever, after all; if nothing else, eventually the sun will go nova and incinerate us all with magnificent even-handedness. How long before that happens are we entitled, or even obligated, to say "enough!"--and make it stick?
1 Er, yes, in response to naval activity in their sphere of influence, thousands of miles from the continental US
2 Really? Without our meddling, decidedly interventionist Lend-Lease and merchant shipping programs? More to the point, would they have liberated the camps before Hitler finished his Final Solution?
3 Much harder to escape your owner than to legally board a train.
That's a good . . . no it's not
Remember how our teachers told us there was so such thing as a dumb question? I think they may have misled us.
December 26, 2007
Be our guest!
Libertarian Kerry Howley and Matt Yglesias are having an interesting back-and-forth on her excellent article about guest workers, which ran in the latest issue of Reason. Kerry's article is a broad brief in favor of the programs, based on looking at how it works in Singapore. To which Matt responds:
I’d definitely recommend that you give Kerry Howley’s Reason article on guest workers in Singapore a read. It’s a very thorough and balanced discussion of the way it works. That said, given that the crux of the opposition to such programs for the United States is “it’s repugnant and un-American, violating everything this country stands for” to say in reply but look at how well it works in a small, regimented, highly inegalitarian Asian dictatorship doesn’t seem very persuasive.The experience of a more similar society, Germany, is not something that many Americans look at and would desire to replicate. Meanwhile, I have no desire to see the United States become more like Singapore. We are, however, in the midst of a burgeoning libertarians against democracy moment (a return to classical liberalism’s traditional anti-democratic sentiments) of sorts, so maybe we’ll start seeing more and more aspects of Singapore and Hong Kong recommended to us as models.
No, we don’t want to be more like Singapore overall. We want to be more like Singapore in the ways that Singapore is more liberal than we are. I think we can reasonably expect a U.S. guest worker program to be more compassionate and less disturbingly efficient than a Singaporean one. If the system is bettering lives over there, it would surely do so in a country less excited about, say, executing people for marijuana possession.
I don't think we're particularly like Germany, which like most European countries, is still dominated by an ethnic view of what constitutes "German-ness". But I do think this rather short shrifts the question of how American society would have to change to accomodate large numbers of people who have no vested interest in our country.
I'm in favor of much more open immigration, but I'm not in favor of unlimited immigration, because I think that without limits, immigration could easily exceed our ability to assimilate immigrants. Cultures have some right to preserve themselves; America does not have a duty to suddenly double its population with people who don't speak English, have no experience with functioning liberal democracy, and low economic productivity--even if it would, as is undoubtedly true, make all those people better off.
Not that Kerry is advocating any such thing; I'm just illustrating that there are limits to our obligation to make poor people in other countries better off by allowing them to migrate here. I think that obligation is substantial. Almost no one reading this would be here if America hadn't thrown open her doors to their ancestors, and so we have something close to a sacred duty to extend that welcome to as many more people as possible. But we don't have an obligation to radically alter our society in order to make it more friendly to guest workers.
So how radically would we have to change in order to accomodate the transient population? Kerry's article offers a hint:
And yet Manalac is very much a guest in this country. He says he’ll remain for as long as they’ll have him, though he doesn’t presume to have any right to stay. If he were fired or became unable to work, he’d have to leave within seven days. He is subject to regular medical examinations to ensure that he is HIV-negative. He can’t bring his children here. He can’t bring his wife here. Were his marriage to fail, it would be illegal for him to marry a Singaporean. Were he female, a pregnancy would mean repatriation or abortion. The Singaporean government has made itself very clear: Foreign workers are here to build a nest egg, not to build a nest.
What will we do with pregnant guest workers? For three to six months, at least, they won't be working. They'll need health care; who will provide it? Will we force companies to provide their guest workers health care, which will make them uneconomical compared to other low-skilled labor, or will the taxpayer foot the bill? Do we ship them home? Do we rewrite our constitution to exclude their babies from citizenship?
We could simply discriminate against female guest workers, as many countries do; or we could allow employers to do so, as they do in most places where such things are allowed: firing the ones who get pregnant, or locking them in at night so that they can't get into trouble in the first place. It's not really surprising that the female guest workers she interviews for the articles are maids, closely supervised by the families they work for.
That's one troubling question. Here's another: do we let the guest workers date and marry American citizens, as they will? Because if we do, we'll find a lot of our guests have become permanent members of the household.
Then there's the question of social services; even if we force employers to cover health care costs, what do we do for guest workers who are between jobs? Send them back to Mexico? If we let women in, we will end up with a largish number of new citizens: are we obligated to educate them? Can they sign up for S-Chip?
But mostly, I worry about having a large number of people in the country who are, definitionally, not planning to stay here. There's something corrosive about transience: witness the way college students treat their neighborhoods. (And don't tell me they're young; they're prime guest-worker age.) Civic bonds can withstand culture clash, but I'm not sure they can withstand pockets of people who are just there for the job.
And though Kerry says that this is probably the only way we'll get to expand legal immigration, I'm not exactly sure what a guest worker program buys you--unless we really do exert Singapore-style controls to keep the workers herded in ghettos, unable to date or marry American citizens and watched like hawks by cops with a rather casual attitude about civil rights. The main objections of Americans to illegal immigration has nothing to do with the brown people staying too long. Rather, it is that the brown people introduce change to your community (all the signs are in Spanish!), commit crimes, use social services, live in slumlike conditions that reduce local property values, have babies that automatically (and at great taxpayer expense) become citizens, and refuse to assimilate. How will forcing them to leave after five years, while immediately replacing them with a new crop of non-English speaking, social service consuming, child-having extremely poor people living eight to a room actually relieve any of these tensions? Ultimately, I suspect that a guest-worker program would end up doing more harm than service to the cause of freer immigration.
Update Given that a couple of people I respect have misunderstood me, let me clarify: I'm not against immigration. I'm for expanding legal residency programs a lot. I don't particularly care about legal immigration. I am specifically against creating a guest worker program. It might, in the short run, seem like a cute way to do an end-run around anti-immigration sentiment. In the long run, it brings i