Sunday, October 7, 2007

The Sad Irony of Climate Change Hysteria

We increasingly inhabit a world of our own imagination, and that, in itself, is not a bad thing. I am posting this on a blog. A blog is not a real place; it exists, or perhaps does not exist, only in the ether. It is an imaginary space made possible by technology; technology made possible by the fruit of the human mind. This is a positive manifestation of human imagination.

The problems with imagination arise when we become so enthralled with our own ingenuity that we fail to see the forest for the trees. Take a look at this article, and then look at this one. See a disconnect there? Can you appreciate the irony? If not, then I suspect it is because you are well-fed and comfortable. You have already benefited from the long and steady march that has been the last few thousand years of human history.

The really morally repugnant aspect is that while we take food away with one hand, we pat ourselves on the back with the other; and out of our mouths we speak self-righteous half-truths.

To make the claim that climate change is the biggest problem facing the world is to stoke the imagination with thoughts of poverty, hunger, and depravation, while, in reality, remaining mostly indifferent to poverty, hunger, and depravation.

Environmental extremism is a secular religion, and, as such, is not a new story. It has been with us as long as consciousness has been with us. It is the mythological story of Prometheus, who stole fire from the gods, or Icarus, who flew too close to the sun. It is the biblical story of Babel and of the flood. It is the story of a thousand prophets of gloom and doom, who have stood on the nearest available mountaintop, or soapbox, and proclaimed to all who would listen, “The end is nigh!” It is the paradox of humility that asks us to tread lightly, if at all, on this earth while it pretends to predict the next fifty to a hundred years of human and natural history.

It is all right there in those two stories: imagination verses reality.

Thursday, September 27, 2007

SCHIP: Get Healthcare or Die Tryin'

Kelvin Martin was a notorious stick-up artist from the projects in the Fort Greene section of Brooklyn. Despite his small stature, he was only 5’3”, he was able to make a nice living for himself robbing drug dealers and rappers throughout the 1980s. Not surprisingly, he died an early and violent death. Kelvin Martin was known as 50 Cent, and his moniker lives on today as the adopted name of rapper Curtis Jackson.

Jackson took the name, “because it says everything I want it to say. I'm the same kind of person 50 Cent was. I provide for myself by any means.” Prior to his multi-million selling major label debut, 50 cent, the rapper, scored an underground hit with the track “How to Rob”. That song details 50’s plans to rob a litany of successful artists, and personifies the “by any means” attitude that has pervaded much of hip-hop culture:

Aiyyo the bottom line is I'ma crook with a deal
If my record don't sell I'ma rob and steal
You better recognize nigga I'm straight from the street
These industry niggaz startin to look like somethin to eat

Despite the rather ugly subject matter, the song actually seems crafted for comic effect and the backing track makes “How to Rob” seem less menacing than tongue-in-cheek:

Did you ever think that I'd flash the nine?
And walk off with your shit like it's mine?
I'ma keep stickin niggas until I'm livid
I'll rob Boys II Men like I'm Michael Bivins

Is it that our federal legislature has been listening to old 50 Cent mix tapes, or is just that street culture displays the inevitable trickle down effects of governing by redistribution? I tend to think the latter. So, while I should react with no great surprise, I cannot help but be slightly disturbed by SCHIP. I am fairly ambivalent about the program itself. I do not know enough to pass judgment. It is the idea of taxing smokers to pay for it that bothers me. If this is such a wonderful program, then why don’t we all pay more taxes to pay for it? I can leave the answer to that question to be answered by another question; the one posed by either 50 Cent.

Why pay for something myself, when somebody else already has it?

As David Broder writes it in The Washington Post:

The bill would be financed by a 61-cents-a-pack increase in cigarette taxes. If ever there was a crowd-pleaser of a bill, this is it.

I suppose I am sad because so many people see this as a good, and just, and moral thing to do. It is an interesting brand of morality that we are peddling these days. One can only imagine the following scene in which ‘little Jimmy’ comes home from school crying:

‘Little Jimmy’: Mommy I want x, and I don’t have x. I have to have it. I need x.
Mom: Well, ‘little Jimmy’, that’s easy. Just get together with a bunch of your friends at school; find someone who has x and isn’t very popular and take it from him.

In that context, it sounds rather perverse, but pass it in Congress and give it stamp of “democratic action”, call it the “will of the people”; then theft becomes appropriation; vice becomes virtue; and the vulgar predatory behavior that would seem to typify prison life becomes “social justice”.

Tuesday, September 25, 2007

Three Cheers to the Death of Times Select

The New York Times is arguably the best newspaper in America. So, this piece by Bob Herbert may say something about the state of journalism in this country. Mr. Herbert has taken some very complicated and convoluted concepts (i.e. race, politics, the history of political parties, elections, etc...) and managed to boil them down to one simple and elegant idea: Republicans hate black people!

There it is. The plethora of opinions and the varying degrees to which individual politicians and constituents hold those ideas can all be easily condensed to that one simple and elegant idea: Republicans hate black people!

The other sublime aspect to Mr. Herbert’s remarks is illustrated when he refers to Clarence Thomas. As he states it, “In 1991, the first President Bush poked a finger in the eye of black America by selecting the egregious Clarence Thomas for the seat on the Supreme Court that had been held by the revered Thurgood Marshall.” Mr. Herbert’s use of personification is quite telling. The reference to “the eye of black America” demonstrates quite well his belief that all black Americans see things, or at least ought to see things, the same way; that is to say, his way. Here we derive another simple and elegant maxim: Black Republicans hate themselves!

It is hard to express the degree of gratitude I feel towards Mr. Herbert for taking such complicated and obtuse issues and distilling out these simple and, if I may say, quite beautiful truths. I should also point out that he has not bothered to muck up his argument by dealing with Copperheads (who depicted Lincoln as Abraham Africanus 1), The Solid South (which instituted Jim Crow), The New Deal (and its support for labor unions that excluded black workers), Great Society (and its lingering affects on the economic and moral landscape of this nation’s black communities), or any of a number of other questionable aspects to the Democratic Party’s policies as they pertain to black Americans. It is just not polite to question the generally held perception that: Democrats love black people!

I suppose that when Mr. Herbert writes, “The G.O.P. has spent the last 40 years insulting, disenfranchising and otherwise stomping on the interests of black Americans”, he is referring to things like reforming the welfare system, getting tougher on crime and opposing affirmative action. If that is the case, then he is absolutely correct that these things oppose the interests of black Americans... if the interests of black Americans consist of remaining stuck on the government dole, pursuing lives of criminal activity and being held to generally lower standards of achievement and accountability. If a white person expressed that sentiment, I might go so far as to wonder aloud if he were not, in fact, sounding blatantly racist.

I wish that I were shocked by the level of vitriol and astonishingly ill thought-out logic that characterizes this piece; but, honestly, I am not. It is typical; and that is sad.

Monday, September 24, 2007

Obama Goes to 1-0

Barack Obama must have an interesting definition to the word “fair”:

"We shouldn't be distorting our tax code to benefit a few powerful interests," Obama said in remarks to several dozen tax experts at the Tax Policy Center, a research center in Washington run by the Urban Institute and the Brookings Institution. "We should be insisting that everyone pays their fair share, and when I'm president, they will."

Or perhaps he has a very wide definition of what constitutes the middle class. At least that is what I am led to believe when I compare his remarks on tax policy with a bit of empirical data:

If you can read, you can see the contradiction for yourself. If the top ten percent of Americans earn forty-two percent of income while paying sixty-six percent of Federal Income Taxes, I would tend to characterize that as paying “their fair share”.

There are those people in this world who honestly feel that it is the government’s job to play Robin Hood. There is a perfectly rational argument to be made for taxes as a means of redistributing income. It is not an argument I agree with, but nonetheless it does pass the minimum standards to actually be considered an argument. What Obama is saying, however, does not even make it over that bar. He is obfuscating plain facts and pandering to class anxiety; in short, he is doing what politicians have done since time immemorial. So much for an end to “Small Politics”.

Thursday, September 13, 2007

If These Are Our "Prospect"s, Then We May Be In Trouble

There are a number of obvious ways that editorial choices can tilt media coverage: the writers hired, the stories chosen, the perspective taken; however, I think it’s rarely noted the degree to which style makes a difference. When I refer to style, I don’t mean it in the fully technical

Take, for instance, the following sentence from this article in The American Prospect:

America builds ever-more-innovative products, but ever-fewer Americans share in that bounty.

See a problem with this sentence? I mean the sentence itself, not the idea behind it. Ultimately, the two are related, but first things first. The sentence attempts to construct a parallelism contrasting increasing production with decreasing bounty. My argument is simple: this statement fails rhetorically before it even gets to the underlying idea. It fails because of the categorical differences in the two things the author is trying to compare.

The first phrase talks about America, but what does Meyerson mean when writes, “America”: the geographical place, the political entity, the numerous ideological constructs that tie together a people who call themselves countrymen? Whatever he means, he surely is not referring to the same thing, or group of things, that he refers to in the next sentence as “Americans”.

I would hope that my point is becoming clear. While it is correct to say that plenty of things are produced “in America”, or “by Americans”, or even “by the American government”; as far as I know, no tangible good or service has ever been spontaneously created out of the American ether. Individuals or firms produce goods, and that ought to be a simple and uncontroversial empirical fact.

A much more rational argument could be made that since individuals and firms benefit from being situated in a politically stable country with an educated workforce and affluent customer base that a significant portion of their productivity is due to being in America. And a rational response would point out that is why we pay taxes; in fact, the highest corporate taxes around.

Tuesday, August 28, 2007

The Economics of Envy?

Leave it to the NYTimes to take a fairly simple and common sense economic decision and inject a healthy dose of class consciousness into it.

Now, as far as I can tell, the reason for insurance is to pool resources and mitigate against losses. An insurance company’s liabilities become the liabilities of all its policy holders, to the extent that if the insurance company ever becomes insolvent every other policy holder is going to pay a steep price. So, protecting its most valuable policies (i.e. its biggest potential liabilities) would seem to benefit all policyholders. But, hey, I guess I am just blessed with an overabundance of rationale and common economic sense. If you take it the way the Times is giving it, it's just one more example of the "little guy" losing out while the rich get extra protection.

Wednesday, February 28, 2007

John Edwards, Strike One

there was a moment in the 2004 presidential election when i realized that i would not vote for john kerry. it happened during a debate with president bush when i heard him criticize bush for a growing federal deficit and then a few minutes later make the claim that, as president, he would re-invigorate the economy. i admit that i am only an economic amateur, but i don’t see how a president can speed up the economy without increasing federal expenditures.

here we are facing down the barrel of the 2008 presidential election and no candidate jumps out at me as someone who i would definitely like to see as my next president. so, i figure i’ll just start eliminating candidates as i hear them say ridiculously contradictory things. good thing i didn’t have to wait long for john edwards to cross himself off my list.

this is what he said on meet the press earlier this month:

“And I also think it’s going to be really important to re-establishing trust between America and the world, because the president is, in effect, the personification of America. And when the president, what I believe—one of the things I do believe the president needs to do is, in the first 100 days, travel the world, not just meet with leaders, but speak to the people of the world the way great American presidents have in the past.”

that sentence on its own might have been enough; i was under the impression that the first one hundred days was when presidents went to work on defining their agenda and putting it into action. the clincher actually came later in the interview when he was asked about iranian president mahmoud ahmadinejad:

“He was elected on a platform of economic reform and strengthening the middle class and lifting people out of poverty. He hasn’t done anything about any of those things. What he’s doing instead is he gives speeches and he travels around the world drawing attention to himself.”

i forgot already: is that his opinion about ahmadinejad or a preomonition about his own presidency?

Monday, February 5, 2007

The Equality Issue

i don’t particularly care about fashion. i like nice clothes and i keep current trends and styles in my peripheral vision, but the fashion world itself interests me very little. actually, that’s not entirely true. i do find it fascinating how a relatively small group of people manage to set styles and then change them, which results in other people suddenly deciding that perfectly good articles of clothing are no longer wearable. this phenomenon is especially interesting since these new styles often seem to be terribly unflattering on the majority of people who wear them. the fashion industry as a self-sustaining entity is very interesting.

what i don’t care about are models. it’s a fairly silly idea that high-fashion models represent the ultimate form of female beauty. it is especially silly when you realize that fashion is dominated by women and gay men. if you were to ask the average straight man to describe their ideal female body, you would probably get something closer to a playboy centerfold than a runway model. i once read an article in some fashion magazine about how the ideal body type for models continues to change and evolve. the accompanying pictures showed how at one point models where tall, skinny and had large breasts. a few years later they were tall, incredibly skinny and had no breasts. lo and behold, several years after that they were tall, incredibly skinny and had breasts again. there is a reason that the fashion industry makes for such fertile ground for satire.

all that being said, why am i so interested by all this talk of banning super-skinny models from runways and fashion magazines?

the short answer is easy. i don’t like the idea of government stepping in and telling us how to live our lives. the more paternalistic government and society become, the more like children we will become. behavior has consequences, and when you prohibit people from a certain behavior you also shield them from the consequences. since consequences, and not only laws, play a large role in shaping social behavior, paternalism may very well have ruinous effects in the long run.

that’s the short answer, but there is something else that has been bothering me about the skinny model issue. there is a certain logical inconsistency. i don’t know how many people suffer from eating disorders or how many people die from being too skinny each year, but i am willing to bet that it’s not more than the number of people who suffer from obesity and who die from being too heavy. yet, what would happen if any government or fashion industry organization decided on an outright ban of models who exceeded a certain weight? there would be cries of “bloody murder!”

why is it ok to pick on the super-skinny, but not the obese?

there’s more than one answer to that question, and i don’t want to go into all of them. this post isn’t about that. this post is about the fact that super skinny supermodels have the ability to remind us all of our own weight problems. seeing someone who is really skinny causes a certain type of anxiety that seeing an overweight person doesn’t. as the saying goes: you can never be too skinny or too rich. super skinny models remind us of this, and so do the super rich.

with the rise of populist ideas, there has been a lot of talk about equality. in fact, it seems the richer and more advanced we get, the more the claims of inequality seem to multiply. i’ve been to a few places in the world where people cannot imagine the level of material prosperity that even the poorest americans enjoy– excluding perhaps the homeless. yet, far from being thankful, there is strong notion among some that the american economy, and the free market economy in general, is fundamentally exploitive.

i offer a more personal example of this phenomenon. i live in new york, where the supposed housing slump seems to have skipped us. for the last ten years the price of a one bedroom apartment seems to have been hovering just outside of my grasp. as a result, whenever i see a new condo building going up, a certain feeling of angst begins to take hold of me. on an unconscious level – ok, sometimes it’s not so unconscious- i resent the fact that some other guy is going to buy an apartment in this building and be living the life that i covet. i can see him standing by the window and enjoying the view. i imagine him entertaining friends with a meal cooked in his kitchen full of shiny new restaurant quality appliances. damnit, that’s my kitchen and those are my views! i realize these are ridiculous feelings, but they are there nonetheless.

as someone who one day wants to buy a condo in new york, i ought to be wishing that a new development pops up on every corner and empty lot in the city. it’s basic economic sense: the more units at any given level of demand, the lower the price will tend to be. unfortunately, in a world of unlimited wants and limited resources, basic economic sense often takes a back seat to psychological defense mechanisms. so, instead of focusing on the future opportunities that a new building represents, part of me can’t help but dwell on my present inability to afford one of the apartments.

somewhere in the tenets of economic populism there is a faulty argument that says if you take money from the rich, either through increased taxation or lowered compensation, you are giving money to everyone else. the problem with this argument is that it gives the false impression of the modern free-market system as a zero-sum game where wealth is only transferred and never created. we all know this is false. if the transfer of money was a one-sided deal, then we would hardly ever spend money at all. every time you go to the supermarket you prove the nature of the free-market economy. when you spend four dollars for a gallon of milk you are simultaneously creating wealth for yourself in the form of time, money and effort not spent on buying and maintaining a dairy cow.

so, why does economic populism still carry such amazing sway? i propose that
the answer lies in the afore-mentioned psychological defense mechanisms and in the nature of human evolution. we evolved at a time before the market economy and before the idea of creating wealth. our prehistoric ancestors really did live in a zero-sum world. before we learned agriculture or animal husbandry, we survived on fixed resources. so, one person’s feast indeed came at the price of another’s famine. as a result, we still tend to judge ourselves not by a fixed assessment of what our own needs and wants are, but rather by comparison to what everybody else has.

it makes perfect sense by evolutionary standards. we may well be living at a much higher material standard than people in previous generations or in other countries, but we’re not competing against them. we’re competing against our neighbors. an entire neighborhood can have very nice houses, but only one guy can have the nicest house on the block. we tend to see the success of others as a threat to our own status. it’s caveman thinking and if we start making policy according to those standards the results will be ruinous.

Tuesday, January 30, 2007

Executive Pay

“When I graduated from college, the average corporate CEO made 20 times what the average worker did; today, it's nearly 400 times. In other words, it takes the average worker more than a year to make the money that his or her boss makes in one day.”
- from the Democratic response to President Bush's State of the Union address, as delivered by Sen. Jim Webb, D-Va.

i’m not really sure why executive pay would pop up on a politician’s radar. short of outright wage controls, there doesn’t seem to be much the government can do to change what a CEO makes. the libertarian in me thinks that if politicians stuck to doing their job, they might actually get a few things accomplished. of course, the libertarian in me also thinks the less politicians actually get done, the better off things will be. so, maybe i shouldn’t look a gift horse in the mouth. nonetheless, there is a point of view in webb’s comments that i find particularly disturbing.

perhaps i am being too literal and sen. webb mentions executive pay not because he has any designs on government regulation of private salaries, but rather to make a point about growing inequality and the decline in wages among the middle class.

if that is the case, then i would ask webb just why it is that i ought to care what my “boss” makes in a year or even in one day. this is a curious class of argument, in that there really is no argument. all webb does is state a fact: CEOs used to make x times more money, now they make y times more. nathan smith makes this point in an article on TCSDaily. as smith puts it, webb’s argument concerns relative wealth and does not address whether there has been a real increase in worker’s salaries. since i am not the sort of person who would think less of my own cadillac just because my neighbor got a porsche, it makes much more sense to focus on my own earning power rather than somebody else’s.

this might be a good time to make a baseball analogy. at one point players basically belonged to the team that signed them. they could be traded by the team, but had no real freedom to negotiate a contract with any other team. as a result, they made relatively modest salaries. teams enjoyed a monopoly when negotiating with their own players. after free agency, teams were forced to compete with one another to sign players not under a present contract. off to the races went player salaries.

the relative question to ask is this: if a-rod didn’t make $25 million a year, would a peanut vendor at yankee stadium be making more money? probably not. it seems more likely that the peanut vendor’s salary has much more to do with the price of peanuts and the number of people who come to the ballpark. the more fans and the cheaper a bag of peanuts, the more peanuts he will tend to sell.

now, you could argue that if the yankees paid a-rod less and lowered ticket prices then more people would come to the stadium and our peanut guy would make more money. however, this is only true if ticket price is the only variable that contributes to attendance. it’s not, and there’s no definitive way you could argue that more people would show up at the stadium to pay $10 and watch a team of utility veterans and young talent than would be willing to pay $20 to watch a team of all-stars. likewise, i don’t see how you can make a definitive argument that if CEOs made less money then workers would make more, in terms of real dollars.

there is still a dimension to webb’s argument that may ring true. if large numbers of corporate executives are being overpaid for shoddy work, you could argue that workers, and shareholders, are losing out on the basis of opportunity costs. that is to say, if CEOs were paid sparingly and according to performance then companies, and consequently our economy, would perform better.

so, are executives being paid more than they are worth? i am neither an economist nor an expert on management, so i won’t even pretend to offer a definitive answer on this. the economist just did a special report on executive pay and it seems to imply that big corporate profits have indeed followed from increased executive pay. of course, there are always those cases where executives are paid huge sums of money for performance that can be quantitatively judged as sub par. the home depot’s departing CEO offers the latest example. in terms of the baseball analogy: a-rod sucks, nobody wants to see him play and his $25 million salary is a waste of money.

there are two problems with that approach. the first is that it implies salaries have but one purpose: to reward people for a job already done. that is only one part of the function that a salary fulfills. in a sense, it is a secondary function. for the most part, people negotiate their pay before ever actually performing the job in question. salary is as much an enticement to take a job as it is compensation for fulfilling your duties. unless you work purely on commission, your salary will tend to be more of a reflection on what your employer thinks you can do then on what you have already done.

the other problem lies in the particular comparison that sen. webb makes. for political purposes, it may make sense to compare a CEOs salary to the lowest paid worker in that firm, but it’s a rather meaningless relationship. that is because when companies look for a CEO, they rarely look among the ranks of the lowest paid. a security guard’s salary will tend to reflect more on the market for security guards and less on whether he works for an investment bank or at the gap. i would expect that the only significant differences might arise from the tendency of the investment bank to hire guards with more corporate security experience, whereas the gap may have lower standards for employment.

it might be more useful to compare the pay of CEOs to those who fall directly below them on the chain of command. after all, that is the pool from which new CEOs are most likely drawn.

i read an article in the nytimes a few weeks ago about how fewer and fewer police officers are taking the sergeant’s exam. it turns out that sergeant’s only make a little bit more money than police officers, but they have to deal with the headache’s of being a supervisor. as a result, fewer and fewer officers wish to be sergeants. it’s a perfectly rational decision. why deal with the hassle of being management and make $55,000 a year, when I can make $50,000, work significantly fewer hours and have a lot less pressure on me?

i cannot say anything for certan about the relationship between CEO pay and what other executives make, but i assume they address the above-mentioned phenomenon. if CEOs made only marginally more money than excutive vice presidents, then who in their right mind would want to be a CEO? if there is any truth to what i’ve just written, then exponentially rising CEO pay makes perfect sense. it’s the only way to consistently attract good talent. so, a board of directors may not know for certain that they are getting their money’s worth, but they do know that if they refuse to pay what the market demands they have much less of a chance at hiring a good CEO.

the bottom line is this: if CEOs were paid according to what everyone else thinks they ought to be paid, then we would likely end up with an overabundance of CEOs obsessed more with their public image and less with running their companies well. there’s a word for those types of people… politicians.

Wednesday, January 24, 2007

Economic Populism

this is the expanded version of an essay i wrote for one of my grad school applications. the topic is economic populism; it's something i've been thinking a lot about lately. the next few posts will most likely be variations on this theme.

Economic Populism and the Threat to the World Economy

In 1930 Congress passed, and President Hoover signed, the Smoot-Hawley Tariff Act. It was meant to alleviate rapidly escalating unemployment and rapidly deflating prices by making competing goods more expensive. Other countries followed suit with their own protectionist policies and by some accounts real international trade decreased by fourteen percent. What was meant to combat the oncoming Great Depression may have, in fact, exacerbated it and assured its hold on the world economy.

Most policy makers and politicians today understand the negative effects that old-fashioned protectionism can have, not only on world trade, but on the national economy. That being said, there never seems to be a shortage of those who propose a little bit of protectionism as a means to fix supposed inequalities and inefficiencies in the economy. Today, there are those who speak in the euphemism of “Fair Trade” and claim they are sticking up for the working man against big business and global competition.

In fact, it seems that this sort of Economic Populism has become the Democratic Party’s new big idea. They have taken a lesson from Karl Rove and the Republican Party’s former hold on the so-called “values voters” and found their own set of issues and policy initiatives to exploit. That is not to imply that the threat comes solely from Democrats. The real threat is that politicians on both sides of the aisle may rush to “out-populist” their opponents.

This is a particularly ripe era for the message of Economic Populism. Our parents worked for one or two employers their whole lives and those employers provided healthcare and pensions. Now we see that the average person will switch jobs numerous times and that our healthcare and retirement expenses are no longer automatic. Also, our economy seems to be primarily fueled by consumer spending on goods that are increasingly being produced elsewhere. Some argue that free trade, and in particular the spread of discount big box stores like Wal Mart, is gutting us of our manufacturing base and leaving us with low-paying “Mcjobs” in their place. The language of Economic Populism speaks directly to those fears.

Fear can be an extremely powerful human motivator and, as such, can cut both ways. A middle-aged man who has a heart attack might be scared into better eating habits at the thought of dying young and leaving behind a widowed wife and orphaned children. Unfortunately, fear also has the power, at times, to circumvent our rational thought process. The sort of fear that fuels Economic Populism does exactly that; it prevents us from seeing the forest for the trees and is grounded in certain false economic assumptions.

These false economic assumptions manifest themselves in a number of ways. The first problem lies in the characterization of the global economy as global competition. Economic populists portray the global economy as a zero sum game. If the Indian technology sector or Chinese manufacturing is booming, then it must be at the expense of American jobs. If working conditions in Chinese factories are not up to our standards, then it must be that the American consumer’s greed for cheap products is maintaining those conditions. An extension of that problem, lies in applying this zero sum mentality to the domestic economy. If some other guy is getting richer, then it must be because I’m getting poorer. And if I’m getting poorer, it must be because something isn’t fair. That’s where the invisible hand of the marketplace is usurped by the all-to-conspicuous hand of politicians.

It is never politically popular to tell people that we may be better off in the long run losing manufacturing jobs rather than propping up inefficient industries and that the rise in living standards in far-off places like China and India are positive outcomes that do not fundamentally threaten our own standard of living. In fact, by making certain goods and services cheaper they may contribute to a rise in real wages.

In a rapidly shrinking world where consumers are armed with more information, they are going to find the lowest prices whether they come from the factory next door or from one on the other side of the globe. Retailers like Wal Mart are more the reflection of that phenomenon then they are the cause of it. Likewise, in a world where people are always looking to further their education and obtain new skills it makes sense that the market for employment will be much more dynamic than in the past.

There is a real threat that economic debate will be hijacked by those looking to cash in on what is most certainly a more uncertain age. Economic Populism will be a major issue in the next few election cycles. The world is getting smaller; that is a fact. If we arm ourselves with sensible policy and do not give into fear, that phenomenon has a chance to impact the world in a number of positive ways. However, that will only happen if we continue to make trade policy based on economically sound principles and not by pandering to people’s fears.

Wednesday, January 17, 2007

Liberal Anger, Liberal Pessimism, part ii

i called this post “liberal anger, liberal pessimism”, but i don’t mean to imply that these are purely liberal phenomena. in the article on the new anger, peter worth mentions ann coulter as an example of conservative anger. this anger from the right is the result of the same sort of oppositional thinking that animates its liberal counterpart. the conservative sees herself, and other conservatives, as a pious, moral and patriotic holdout in an increasingly profane, immoral and disloyal world. the perfect example is bill o’reilly, the self-proclaimed culture warrior.

i just started reading a book called the white man’s burden. the author, william easterly, gives away his main contention with the book’s subtitle: why the west’s efforts to aid the rest have done so much ill and so little good. easterly divides those who work on issues of international economic aid into two categories: planners and searchers.

planners are those who would solve the world’s problems with big comprehensive solutions. they propose grand plans that are devised by technocrats and mandated from the top by a partnership between the UN, international agencies and the nations of the developed world. searchers eschew these big plans in favor of smaller, more pragmatic, market-based solutions that seek to address specific needs in the developing world. i propose that this planner v. searcher approach provides both a more accurate and more precise way view political anger and pessimism than the liberal v. conservative split.

for both the orthodox liberal and the orthodox conservative, issues of race are generally just battles in a larger ideological war. black americans have been the guinea pigs, or perhaps the control group, in this american experiment. take the case of the civil war. ostensibly, the civil war was fought over whether the federal government or individual states had the right to determine the slavery issue. in a larger sense, however, it was really a fight over just what sort of america this was going to be. it was a war fought to decide whether this country would move forward into the industrial age, embracing modernity and a dynamic socio-economic landscape or would remain a static and largely agrarian society dominated by a class of landed gentry whose notions of honor and chivalry were based on a highly stratified social order.

ever since the new deal, there has been another ongoing debate over what sort of place america ought to be. as with international aid, planners want socio-economic change that is animated by big government, top-down mandates, and searchers opt for decentralized, market-driven solutions. i pick on liberals in regards to race issues, because they have placed themselves firmly on the side of planners. they have chosen to view the issue of civil rights as primarily a grand social movement to be furthered through things like gerrymandered voting districts, affirmative action and government entitlement programs. at the onset of the civil rights movement, and in the face of jim crow, that may have been more appropriate. today it seems quite clear many obstacles black americans face are psychological in nature. continually waking up to a dream deferred has left many without hope, when hope is precisely what is necessary.

the writers at the ny times, and other liberals, see a fairy tale in the story of a black man waging a war on his own personal poverty as a threat because it contradicts their own idea that liberal social policies are the black man’s only salvation. they are planners. they focus on the big picture, and in doing so, completely ignore the issue of individual liberation. of course, individual liberation is precisely the point of the liberal democracy. more to the point, black americans will only experience true freedom when they are free to be individual americans.

Tuesday, January 9, 2007

Liberal Anger, Liberal Pessimism

i recently read two things that got me thinking about the same idea.

one was this article on the national review online concerning what author peter wood refers to as “the new anger”. he spends most of the article recounting an exchange that began when brink Lindsay, from the cato institute, wrote an article in the new republic proposing that liberals and libertarians would make natural electoral allies. the response from TNR editor jonathan chait was characterized, by a “withering disdain”. while this new sense of political anger can be seen on both the right and left, the author asserts that the left has embraced it to a much greater degree.

the other thing was this review of the pursuit of happyness in the ny times. i had to read one particular sentence several times, because, quite honestly, it astounded me. this is it:

How you respond to this fairy tale in realist drag may depend on whether you find Will Smith’s performances so overwhelmingly winning that you buy the idea that poverty is a function of bad luck and bad choices, and success the result of heroic toil and dreams.

it’s not? of course it is. if you took a given population of people with a wide range of incomes and then looked at their respective levels of education, i am quite certain that you would find a larger number of high school dropouts towards the bottom of that income distribution and those with advanced degrees toward the top. in other words, those people who either choose to drop out of school, or are unlucky enough to be forced out by mitigating circumstances, are definitely much more likely to find themselves in poverty. it seems so logically consistent that it’s basically a tautology.

i ran this argument through my head in a number of different variations, but trying to prove that statement definitively false seems beside the point. ultimately, one’s likeliness to agree or disagree is probably determined by one’s pre-existing world view. if you think that we are fundamentally pawns to larger societal forces then you will agree; whereas if you think people tend to succeed or fail on their own merit then you will not. furthermore, an argument between those two sides will inevitably just come down to an argument over the definitions of the words choice and luck.

the really interesting discussion - and this extends to the discussion on political anger, as well- concerns the evolution of these ideas and their respective world views. for me, the perplexing thing here is not how someone could come to agree with the above statement, but why. i do not know if the times reviewer has children. if she does, i can’t imagine her sending them off to their first day of school by saying, “now children, it really doesn’t matter how hard you work or what choices you make. certain people are born to be successful and certain people will always be kept down by society. there’s just nothing we can do about that, so don’t even bother trying.”

i don’t know if this is something that has been, or even could be, proven quantitatively, but i am willing to bet that the belief in one’s ability to overcome obstacles and “make your own luck” is probably even more directly correlated to success than is education. if you want to affect positive societal change, then one of your goals should be to foster a basic sense of self-reliance and optimism in those that have fallen victim to nihilistic self-defeatism.

for the sake of contrast i decided to check out the ny times review of menace 2 society. as i suspected, here is a movie praised for its “painful believability”. as the review puts it:

Sequences in which Caine and his posse hang out and toy with guns, drinking beer and spouting an endless litany of sullen profanities, offer a convincing close-up picture of a generation of black teen-agers lost in inner-city hell.

The movie is especially good at showing how the ubiquity of firearms, the violence of television and video games and an insanely inflated macho ethic combine with boredom and hopelessness to create a combustible atmosphere that can explode at any second.

here again is the idea that individual behavior always acts at the behest of larger societal forces. violence is not an act that one person commits against another; rather it is something that materializes from the sociological ether to ensnare both victim and perpetrator.

trying to prove this argument right or wrong will inevitably come down to the question of competing world views. and, again, the more interesting question is why certain people find this world view more compelling. to state this question in terms of the present discussion: why does the editorial and critical viewpoint of the ny times treat the idea of a young black male who takes responsibility for his child and succeeds by his own superhuman efforts as a “fairy tale”, while upholding the image of other young black males drinking malt liquor and committing random acts of violence as much more “convincing”?

the immediate response might simply be that one is truer than the other. it would be nice if all poor people could just propel themselves out of poverty, but the reality of the situation is that they can’t. so, if we ever want to bring about a better world, then we need to focus on changing society first.

the immediate response comes with an immediate problem. both movies are works of fiction, but one, the pursuit of happyness is based on a true story. there is a real life will smith, his name is chris gardner, who did in fact propel himself out of poverty. what’s more, there are many chris garnders; black men who take care of their children and work for a living. to say that the image of a responsible and entrepreneurial black man is less realistic than an irresponsible, shiftless and violent one is can only be characterized as bigoted.

so, it seems that i have come to accusing the ny times, a generally liberal newspaper, of being racist. not only that, but i have done so on the basis of two unrelated movie reviews. i admit that it seems suspect. it seems like the sort of post-structuralist methodology that i always found rather dubious as a undergrad english lit major. so, no, i am not accusing the ny times movie reviewers of being racists. i don’t think that most liberals are bigoted, but it does seem that the inherent helplessness of the black underclass – and the underclass as a whole – is a fairly popular theme in liberal thought.

in reality, race is relatively minor consideration in this particular liberal world view. the angry black man, the victimized woman, poor white trash from the wrong side of town; those are all bit parts. the star of the show is the liberal herself. it is the liberal, and liberal social policies, that hold the only true hope for bringing about justice and equality.

this idea also holds the key liberal anger. it seems quite appropriate that chait would respond to a fairly innocuous intellectual olive branch with such vitriol. in my experience, nothing gets liberals quite as flustered as interacting with libertarians; not even an exchange with the most right-wing of right-wing conservatives. perhaps that is because no matter how much they may disagree with conservatives, they need that conservative position to make sense of their own. the liberal imagines her own intellect, compassion and open-mindedness in opposition to the ignorance, indifference and closed-mindedness of the conservative. the particular object of discussion matters much less than the chance to posit liberal ideals in the face of the conservative enemy. it’s a self-continuing process of mutual opposition, and it has very little to do with ending poverty or promoting racial justice.

Tuesday, January 2, 2007

Random Thoughts in the Midst of Other Random Thoughts

i'm in the midst of wrapping up the global warming post, but i'm also finishing grad school applications this week. so, part 2 will have to wait. unfortunately other random ideas keep popping into my head, and i find it more useful just to write about them then to let them linger and distract me from the applications.

in particular, i've been thinking about the idea of price; price as a mechanism within marketplaces. in specific, i've been thinking about how price works in the healthcare and education marketplace. i've always been in favor or market reforms to healthcare and school choice and vouchers as a means of reforming our public school system. however, these views were mostly just reflections of my general bent towards free market policies.

a few weeks ago i read an article in the ny times (i would link to it, but it's been placed in that wonderful "lockbox" called times select) about how some colleges raised their prices and subsequently raised the number of applicants. around the same time i learned something new from a doctor friend of mine: most medical fees are based on what medicaid pays. i realized that i knew nothing about the price of healthcare. i know what a bottle of aspirin costs in the drug store and i know roughly what a night in a new york hotel costs, but as for an aspirin administered in a hospital or a night's stay in that same hospital... i haven't a clue, nor do i know where to begin to look for such information.

in both the case of healthcare and education, there seems to be something fundamentally wrong with the pricing mechanism. i'm not sure how that affects my views. that part is a work in progress.

in the meantime here is post i wrote on's reader forum in response to this and this (both articles in favor of socialized medicine):

krugman, wells and noah seem to imply that national healthcare is the obvious answer to a question that's only being obfuscated by special interests and libertarian ideologues:

"In particular, the Bush administration is under the influence of both industry lobbyists, especially those representing the drug companies, and a free-market ideology that is wholly inappropriate to health care issues."

in regards to the latter argument, perhaps healthcare is not a system that translates exactly to the market for cars, lawn care, widgets or whatever other goods or services people need. but that is a long way from "wholly inappropriate", which implies that the marketplace has nothing whatsoever to contribute to the debate. this sort of hubris and blind faith in government bureaucracy is as dangerous as blind-faith in free markets.

and that danger can be seen in the former argument, a claim that really perplexes me. how does switching to single payer system make these industry lobbyists go away? are the nurses and hospital workers unions just going to accept what government technocrats decide to pay them? will medical associations acquiesce to the diminished salary and standing physicians might play in this new healthcare system? and what about healthcare and drug companies? with socialized medicine they essentially become government contractors. well, that's good news because we know government contracts are only given out in the most fair and efficient manner and the process almost never involves wasting money…

look at the role that teacher's unions play in deciding education policy or haliburton in defense spending. i just don't see how congressman beseeched by special interests or government bureaucrats insulated from voters are automatically better suited than market forces to decide how healthcare resources get allocated.

critics of the iraq war most often blame bush for failing to either envisage or admit to the unintended costs, in lives, money and america's diplomatic standing, of invading iraq. yet, here timothy noah makes the same sort of argument for steaming full steam ahead into socialized medicine.

just because something works in another country, doesn't necessarily mean that it's going to be successful here. it's very easy to see that doctors in taiwan, a culture where perhaps there is a greater willingness to do what's best for the group at your own expense, might accept less money and prestige, while their American counterparts will balk. and for the english, forming a proper queue is almost a source of national pride. that doesn't mean that we'll stand for it here.

here's an idea: how about we move the burden to the states. let each state decide how it's going to deal with rising healthcare costs. some may adopt single payer systems and others may opt for a consumer-driven model. they won't all work or be viable in the long-run, but at least we'll have as many as fifty different approaches being tried. and once certain models prove to be more effective then those states with failing models can switch.