February 18th, 2011 — Politics
Does anyone know of a liberal commentator with a history of arguing against the filibuster in the Senate who is now arguing against the tricks used in Wisconsin by the Democratic Party (where minority legislators have fled the state to deny quorum to the majority)? After all, a minority shouldn’t hold a majority hostage with sly tricks and all that.
February 17th, 2011 — Economics
1. Ayn Rand in her book Atlas Shrugged
2. Over the last few decades, the US became freer (huge gains for non-whites, women, and minorities, in general), but the rest of the world made even larger gains. The US barely makes the top 10 in the economic freedom index of the Heritage Foundation anymore (liberals that like to argue that the US should be more like Canada or Denmark should know that the Heritage Foundation agrees). Given the trend, it would not be surprising if the US continued to lose places in this ranking.
3. The reports of Americans themselves fleeing for freer jurisdictions are still anecdotal (there are queues to renounce American citizenship in Singapore and London). However, even if the talent traffic has not reversed, it slowed down. Atlas, when he shrugs, isn’t necessarily coming to the US anymore. He’s or moving to Toronto or Tallin or Sidney.
4. What I’m writing fits perfectly into the framework of The Great Stagnation
5. The expression catch up growth, while describing a real phenomenon, also reveals a complete lack of respect for the difficulty of solving many of the problems that hold poor countries back. These are often complex social and political problems and they require the entrepreneurial spirit, the tenacity, and the intelligence that would have gone into making kitchen gadgets a generation ago. It’s probably a win for the world.
February 12th, 2011 — Economics
Yesterday, my twitter and RSS feeds were full of complaints about how the republicans were going to cut science funding. Save Science! A few weeks ago, it had been full of people screaming about Rand Paul’s plan to cut science funding.
As it happens, none of these were plans to cut science funding specifically. Some of the mainstream outlets did not even mention science funding in their descriptions. The proposals would cut all across the discrecionary budget, mostly excluding defense.
I imagine that environmentalist groups sent emails touting cuts to the EPA, pro-choice groups sent email about cuts to family planning, the affected unions cried out about job cuts in their ranks, energy people were upset about cuts to their pet projects, train lovers think Republican hate trains, &c
And all of this without touching the third rail of American politics: cuts to services to old people. Otherwise, the AARP would be crying that Republicans want the eldery to live on cat food. Of course, most of federal spending is on the eldery, so it is logically odd that no cuts were proposed there.
Everyone feels personally attacked (Republicans hate science, they hate trains, they hate wind energy, they hate old people), but something’s got to give. If you don’t think that your budget should be cut, whose budget should be (you can answer raise taxes to cut the middle classes’ budget)?
February 11th, 2011 — Uncategorized
The case for state-level support for the arts is strongest, by far, for the state of New York for reasons related to tourism and New York City. But Manhattan, Kansas? Let them watch YouTube.
— Tyler Cowen (at marginal revolution).
February 10th, 2011 — Uncategorized
Micromort animation. A micromort is a one-in-a-million chance of dying. (h/t: Bruce Schneier)
February 7th, 2011 — Uncategorized
From the Volokh Conspiracy:
There are perfectly reasonable arguments that the health care mandate is constitutional. But no one who supports Roe v. Wade is any position to accuse judges who rule otherwise of failing to respect democracy, interfering improperly in complex policy matters based on their own understanding of the consequences of the relevant legislation, or reading into the Constitution limitations on government power that aren’t there.
For all of the talk of a brocolli argument (is Congress allowed to mandate consumption of brocolli?), the Roe v. Wade argument is the politically important one. If Congress is allowed to mandate that you buy health care why is not allowed to mandate that you do not buy abortions (or to tax them at $10000 a piece?)
February 6th, 2011 — Economics
Portugal does not have the highest debt of the eurozone, nor its highest unemployment, nor did it have a real estate crash. It didn’t even have the largest budget deficit. Yet, it seems like it will be the next domino to fall.
The reason is actually pretty simple: its growth prospects are poor. Markets are forward looking, rather than backwards looking. Normally, debt and recent deficits are a good indicator of whether, going forward, the government will be able to service its debt. However, in some cases that relationship breaks down (for example, if the country just got out of a war, its future will look very different to its recent past). In Portugal’s case, the debt is not that worrisome, and its deficits are not that large, but growth has been stagnant and there is little indication it will change.
For decades now, the average yearly growth rate has been slowing down (especially if you disregard the period just before and after the 1974 revolution as exceptional). In the last decade, it has barely been above 1%.
Why? Here, unfortunately, it gets messy. It feels like a death by a thousand cuts.
1. The labour market is awful. Many are familiar with the sclerotic Spanish market and the division into overly protected cosy jobs and bad, underpaid, precarious ones. Portugal’s labour market is, in some senses, worst. A proposal to make it as liberal as Spain’s (!) is being resisted by the unions.
2. The bureaucracy of the state has improved in recent years, but it is still a drag on the productive economy. Especially at the local level, things take too long and are overly unpredictable. See this Bloomberg report for a good description. Lisbon has more vacant houses than houses where people live in! Most of the vacant houses are owned by people who have been waiting (often for many years) for permission to renovate and put them back on the market. The city does not approve them and Lisbon loses its vitality.
3. There is no large scale corruption like in Greece, nor the state-level corruption of France, but petty corruption is abundant. In general, corrupt politicians still get re-elected. A few years back, one of the social-democratic parties (there are two of them), withdrew support from its most corrupt mayors. It was a good start, but the party got rewarded by losing many seats, whilst the other social-democratic party supported their corrupt mayors and kept them. In a democracy, people get the government they deserve.
4. Since 1968, when the first programme of “democratic education” started, the population is increasingly well-educated, at least on paper. Unfortunately, during the 1980s there was a very large internal brain-drain as most of the college educated chose to work comfy jobs in the public sector rather than start new companies or modernise existing ones. This also meant that the upper middle-class that rules the country (the sort of people a journalist at an important newspaper might encounter at a dinner party) are beholden to the state. Many small private companies, on the other hand, are run by the people with the least education.
5. Speaking of education, it’s not very good. Culturally, it is still not valued enough, with parents caring more about grades themselves than whether their children are learning anything at all (for example, trying to get teacher to dumb down so that their kids get better grades by learning less is common).
6. Large corporations, even when nominally private, are, almost without exception, dependent on the good favours of the state and protected from competition. The exceptions are export-oriented, but there are not many of them.
7. The demographic situation is horrible: there are too many people retiring for the number of workers. Demographics is like a slow moving freight train: it takes forever to get to you, but, when it does, it crushes you. Social security is now partially dependent on the value-added-tax. It will not get better, more general taxes will need to be diverted for it. For as long as I remember it, the pension system is in a process of “reform” (i.e., slowly breaking its promises, slowly increasing its take in taxes). The young are increasingly called to pay more to the older generation (who, in general, have no savings). As their taxes increase, many, the more productive, opt out of the system altogether (Portuguese emigration has picked up again in recent years). Atlas is shrugging.
8. The euro needed to be much looser. Portugal simply adopted a strong currency without the cultural adaptation that revealed itself to be needed.
Frankly, I just don’t see an easy way out for this little country in the short term. The political economy is warped by the older generation which works for the state and will fight for its perceived due. The economic culture is Keynesian even as they keep pulling on the string of public works (the plan is to have 3 parallel freeways from Lisbon to Oporto!). The idea of private initiative is too tainted by the pervasive crony capitalism (while at the same time, the state’s prerogative to choose winners is unquestioned—as if the two were unrelated). Meritocracy is resisted by the mediocre who have cushy jobs (with egalitarian leftists intellectuals serving as useful fools supporting them). There will not be a catastrophe. I’d be surprised with a radical populist up-rising. Portugal just does not like radicals and there are not enough young people. Instead, at least during the next 5 to 10 years, we’ll see a muddling along.
The intervention of the IMF (which still seems inevitable) will buy the country some time, but there is too much wrong with its economy for the fix to be the miracle that some expect.
February 4th, 2011 — Uncategorized
Over at Andrew Sullivan’s blog, Scott Horton ponders why it is taking so long for Mubarak to leave: Human rights lawyers and international prosecutors may take a close look at the tools the deposed dictator used to stay in power. [...] A trip to The Hague or another tribunal might be in his future.
February 3rd, 2011 — Uncategorized
There is this ad that shows up in Hulu about hunger in New York. It ends with the sentence no one should go hungry in New York. I suppose if they go hungry in Africa, then it’s quite alright, is it?
February 3rd, 2011 — Uncategorized
In which I flatter Will Wilkinson by blantant copying:
Let’s take a moment to think about those people who are in the 20% highest income. They might live in a place with guards keeping the hoi polloi out, they might have a very nice car, a good house, they might be, in most senses of the word, rich. However, they don’t feel rich. They are forever being compared to the ones above them. Their cars are just not as nice, their houses not as spectacular.
The description above could easily describe what the US calls its poor:
The poorest 5% of American are richer than the richest 5% of Indians, they are richer than almost 70% of the human population. If we grouped the rich world together (US, Japan, Northern EU), the numbers would be even more impressive when we compare the Western “poor” to the rest of the world.
Many liberals say they care about inequality, the inequality inside the US. But they do not care as strongly about the true inequality of being born rich (in a rich country) versus being born poor (in a poor country). The cosmopolitan left of NYC will say it cares, but it rarely translates into any policy recommendations.
Not so long ago, in American politics, the progressive/populist movement also cared about inequality. They were also deeply racist as their inequality of choice was only amoung white men (women were often not welcome either). As late as 1957, JFK (as a senator) would defend an increase in the minimum wage as a way to protect the white worker from the coloureds (the quotation is properly cited in the comments). Nowadays progressives are not racist anymore, but you can certainly hear the echos of this attitude when they talk about the poor in China (from whom the American worker must be protected).
