Posts tagged ‘United States’

Life in the Trump Era: Conservatives Now Define Raising Taxes as "Progress"

John Hinderaker of Powerline writes approvingly of Trump's apparent trade deal with Mexico.  First, he quotes the New York Times celebrating the higher taxes:

Under the changes agreed to by Mexico and the United States, car companies would be required to manufacture at least 75 percent of an automobile’s value in North America under the new rules, up from 62.5 percent, to qualify for Nafta’s zero tariffs. They will also be required to use more local steel, aluminum and auto parts, and have 40 to 45 percent of the car made by workers earning at least $16 an hour, a boon to both the United States and Canada and a win for labor unions, which have been among Nafta’s biggest critics.

I am not sure how narrowing the scope of products subject to lower taxes is a "boon" to this country, though I suppose labor unions might be happy and one is suspicious that this is sufficient reason for the NYT to support it.  My suspicion is that these numbers are incredibly carefully tailored by Ford and GM lobbyists to hit a couple of their competitors while missing themselves -- this has all the fingerprints of a classic crony deal that benefits very few powerful groups to the detriment of most consumers.

So the NYT can be expected to cheer for bad crony economics that helps a few unions, but what about Conservatives, who are supposed to understand markets and trade.  Hinderaker writes:

So, from 62.5% to 75% to qualify for zero tariffs. Not exactly radical, but positive.

So broadening a US government tax on US consumers is "positive."  Powerline in the past has rightfully chided Paul Krugman for abandoning his understanding of economics in favor of cheerleading the Democratic team.  Now Powerline is doing the same for Trump.

A Thought Experiment Wherein Coyote Makes In Intersectional Argument, Sort of

The following is a thought experiment:

Modern SJW's argue that it is impossible for one gender or ethnicity or sexual preference to understand another.  Taking that as a launching point, there appears to be a crisis in psychology that can only be fixed by government intervention. 

Begin with a basic fact:  Between 3 and 4 times more men in western nations, including the United States, commit suicide than women.  This is clearly a public health crisis of the highest magnitude(1).  

Unfortunately, it is getting harder and harder for these men to get the help they need.  Most psychologists today, and based on current graduation rates, almost all the psychologists of the future are women.  In fact, in 2016 22.4% -- less than one quarter! -- of all psychology graduates were men.  Men with existential crises in their lives are not going to be helped by someone woman-splaining the world to them.  How can any man be helped by psychologists who can't understand their most fundamental problems(2)?

Take this web page at the top of the google search on mental health and gender.   90% of the page covers only women's issues!  There is not even a single mention of suicide or the disproportionate male suicide crisis.  This is just further proof that the strong imbalance of the psychology profession to female providers inhibits any focus on or recognition of male issues.  You can see from this site that men are not even seeking help --"Women are more likely to have been treated for a mental health problem than men (29% compared to 17%)" -- almost certainly because men cannot find sympathetic male psychological help(3).

As a first step, the government needs to step in and find ways to eliminate the barriers that young men are facing in entering the psychology profession.(4)

OK, I have no idea if this is a credible effort but other than the fact that it is pointing out a unique male issue, I feel like this is at least as viable as any other SJW article I have read.  You will note the four tricks I used in the article that are common in many other more serious articles of the same sort

(1)  I assert this a public health crisis, but compared to what?  Are the deaths a lot or a little compared to other preventable causes.  Are the numbers rising or falling?  And how preventable are suicides?

(2) This is the underlying assumption in the article, that a psychologist of one gender cannot well serve a patient of another gender.  Is that really true?  Is there any science on this?  I have had physicians of both genders and have not really noticed a difference.  Of the psychological interventions I am aware of in friends and family, the most successful was a female helping a male.

(3) This is twisting a fact around the opposite of how most people would interpret it.  Most folks would interpret this as women have more mental health issues over their life that they need help with, a finding that seems to be pretty consistent in the scientific literature as well.  The clever conspiracy builder, though, can use almost any fact in their favor.

(4) Why do we assume that a gender imbalance is the result of barriers and discrimination, rather than just preferences? Typically, the media treats such imbalances asymmetrically.  Professions that skew female such as health care or psychology or education are treated as skewed due to preferences.  Professions that skew male such as software programing are treated as skewed due to discrimination.

The Historical Reason I Am Skeptical About Trump's G7 Free Trade Proposal

After hammering various members of the G7 with new tariffs and threats of even more tariffs, Trump proposed that everyone eliminate all their tariff's and subsidies:

Q Mr. President, you said that this was a positive meeting, but from the outside, it seemed quite contentious. Did you get any indication from your interlocutors that they were going to make any concessions to you? And I believe that you raised the idea of a tariff-free G7. Is that —

THE PRESIDENT: I did. Oh, I did. That’s the way it should be. No tariffs, no barriers. That’s the way it should be.

Q How did it go down?

THE PRESIDENT: And no subsidies. I even said no tariffs. In other words, let’s say Canada — where we have tremendous tariffs — the United States pays tremendous tariffs on dairy. As an example, 270 percent. Nobody knows that. We pay nothing. We don’t want to pay anything. Why should we pay?

We have to — ultimately, that’s what you want. You want a tariff-free, you want no barriers, and you want no subsidies, because you have some cases where countries are subsidizing industries, and that’s not fair. So you go tariff-free, you go barrier-free, you go subsidy-free.

Awesome, sign me up. But is this serious?  I want to get to that in a minute but first let me offer two practical observations

  • Trump belabored the 270 percent Canadian dairy tariffs on US products, but at the same time the US tariff rate on Canadian dairy products is effectively infinite, because we simply don't let any in.  This is the kind of complexity he is glossing over.  Forget Canada, his proposal for no tariffs or subsidies would cause a major freakout among US dairy farmers, a business absolutely chock-full of crazy quilt of progressive state regulation on prices and subsidies and quotas.  (and by the way, congrats to Trump for getting progressives like Drum into the free trade, anti-price-control camp).
  • Simple statements like "no subsidies" are easy to make, but is a lower corporate tax rate a subsidy?  How about lower minimum wages?  What about really long copyright lives?  What about when a governor or mayor gives out relocation incentives and tax abatements?  What about the whole Amazon HQ2 deal that is coming?   The list of complexities are endless.  That is why long and complicated negotiations are necessary to reduce tariffs and subsidies.  Fortunately we have actually done this, in deals like NAFTA and the TPP.  Unfortunately, Trump has given both of these the boot.  So is he really serious?

I have a love for history and like to make comparisons of modern events to history, and in this case I believe there is a very parallel case we can learn from.   Here is the problem:  It involves Hitler's Germany.  Hitler is obviously the third rail of Internet discourse, but the example is so parallel I am still going to go ahead, with the following proviso:  I am not saying Trump is Hitler, or making any such analogy or statement.  I am merely attempting to learn from a very similar international negotiation that occurred in the 1930's.

If  you can put aside all the emotional baggage of Hitler being either the worst mass murderer in history or at least in the top 3, he was (at least for a while until it all blew up on him) very successful in getting wins in diplomatic face-offs of the type Trump seems to want (by this I mean gains for his own country in zero-sum or even negative-sum games made by repudiating past international settlements).  Hitler's brashness essentially won out with the reoccupation of the Rhineland, Germany's remilitarization, the annexation of Austria, and even led to the western powers basically handing the Sudetenland over to him.

But the example I have in mind is with the disarmament conferences of the the early 1930's.  Major western powers were looking for some sort of agreement to head off an expensive and destabilizing arms race of the type that occurred in the run-up to WWI (and which by the way was way too expensive for countries bogged down in the Great Depression).  As the powers discussed incremental limits or reductions, one world leader jumped into the fray and proposed that all the powers agree to total disarmament  -- no more militaries at all.  Can you guess who made this radical proposal that would be the envy of any 1960's hippie?**

Hitler had [President Roosevelt's] message before him when he prepared the final draft of his speech to the Reichstag. Contrary to expectation, his speech, when delivered, made no threat of immediate rearmament. Germany was ready at any time, Hitler said, to renounce the aggressive weapons forbidden to her by the Treaty of Versailles “if the whole world also bans them.” Without further ado, Germany would dissolve her whole military establishment “if neighboring nations unreservedly did the same.” For President Roosevelt's proposal the German government was “indebted with warm thanks.” Germany was ready to join in “any solemn non-aggression pact because she thinks not of attack but of her security.”

In making this speech, Hitler said that he above everyone else wanted peace.  He was a soldier, he had been in the trenches, and no soldier wanted war.

Given his past actions, we suspect Hitler was not a total peacenik, so what was going on here?  The Treaty of Versailles had essentially disarmed Germany, reduced its army to 100,000 men and banned it from having an air force and submarines, among other things.  Germany chaffed at these limits, considering them grossly unfair, and wanted limits at parity with those on, say, France.

Hitler always liked to turn other nations' values against them in his international statements.  Later, when he justified potential annexations in Austria, Czechoslovakia, and Poland, he would say that he was just interested in "self-determination of peoples" and that other powers were inconsistent and unfair when they refused to allow this principle they themselves had established to be applied to ethnic Germans in these countries.  Hitler clearly didn't care one bit about free self-determination of peoples, but he was happy to throw US and British and French rhetoric back in their faces.

So in this case Hitler grabbed at the other major powers' pious pronouncements about their commitment to disarmament and again threw it back in their faces.  You want disarmament?  OK, let's do it -- total disarmament.  Hitler knew that they would never do it -- France in particular did not trust Germany at all.  Hitler waited until it was clear the other countries were not going to go for this proposal and said something like, "see, those other countries were never serious, they never wanted peace.  All they want to do is keep Germany down."  He proceeded to resign from the conference,  renounce the military limits of the Versailles treaty, and started building Germany's army and air force.   Which was what he had intended to do all along.

I know from the comments that there are folks reading my blog who honestly don't seem to understand trade and the trade deficit, and I am at my limit in explaining any more clearly.  I know there are also folks who honestly think Trump is following a brinksmanship path to get to a net better set of trade rules in the future.  I wrote the other day that I doubted this, but folks have emailed me the quotes about Trump proposing full free trade as proof of his intentions.  Sorry, while I would love to believe this is true, and will happily admit my error later if needed, I don't believe it for a minute.  It just looks too much like Germany's actions at the disarmament conference.  People who truly want and understand free trade do not say things like "there are too many German cars in the United States."***

 

** This link is squirrelly and sometimes is gated and sometimes not.  The full citation is Boeckel, R. M. (1933). The Disarmament Conference, 1933. Editorial research reports 1933 (Vol. II). Washington, DC: CQ Press. Retrieved from http://library.cqpress.com/cqresearcher/cqresrre1933100900

*** Anyone older than about 45 can tell you how badly US cars sucked before foreign competition, and how much better they are today only because we allowed this competition.  Even if you don't own a German car (and I do), your American car is better and less expensive than it would be without German and Japanese and Korean competition.

 

A Chinese Consumer's Perspective on Chinese Trade Policy

This is, plus or minus, a reprint of an article on trade policy written 12 years ago at our Chinese sister publication, Panda Blog.

Our Chinese government continues to pursue a policy of export promotion, patting itself on the back for its trade surplus in manufactured goods with the United States. The Chinese government does so through a number of avenues, including:

  • Limiting yuan convertibility, and keeping the yuan's value artificially low
  • Selling exports below cost and well below domestic prices (what the Americans call "dumping") and subsidizing products for export

It is important to note that each and every one of these government interventions subsidizes US citizens and consumers at the expense of Chinese citizens and consumers. A low yuan makes Chinese products cheap for Americans but makes imports relatively dear for Chinese. So-called "dumping" represents an even clearer direct subsidy of American consumers over their Chinese counterparts.  We Chinese send our resources, our capital, and the output of our most productive workers overseas to be enjoyed by American consumers, and what do we get in return?  A trillion dollars or so of foreign exchange surpluses that our government invests for 2% returns in US government bonds.  Yes, that's right -- not only are we subsidizing American consumers, but we are subsidizing their taxpayers by financing their government's debt at low interest rates.

This policy of raping the domestic market in pursuit of exports and trade surpluses was one that Japan followed in the seventies and eighties. It sacrificed its own consumers, protecting local producers in the domestic market while subsidizing exports. Japanese consumers had to live with some of the highest prices in the world, so that Americans could get some of the lowest prices on those same goods. Japanese customers endured limited product choices and a horrendously outdated retail sector that were all protected by government regulation, all in the name of creating trade surpluses. And surpluses they did create. Japan achieved massive trade surpluses with the US, and built the largest accumulation of foreign exchange (mostly dollars) in the world. And what did this get them? Decades of recession, from which the country is only now emerging, while the US economy happily continued to grow and create wealth in astonishing proportions, seemingly unaware that is was supposed to have been "defeated" by Japan.

We at Panda Blog believe it is insane for our Chinese government to continue to chase the chimera of ever-growing foreign exchange and trade surpluses. These achieved nothing lasting for Japan and they will achieve nothing for China. In fact, the only thing that amazes us more than China's subsidize-Americans strategy is that the Americans seem to complain about it so much. They complain about their trade deficits, which are nothing more than a reflection of their incredible wealth. They complain about the yuan exchange rate, which is set today to give discounts to Americans and price premiums to Chinese. They complain about China buying their government bonds, which does nothing more than reduce the costs of their Congress's insane deficit spending. They even complain about dumping, which is nothing more than a direct subsidy by China of lower prices for American consumers.

And, incredibly, the Americans complain that it is they that run a security risk with their current trade deficit with China! This claim is so crazy, we at Panda Blog have come to the conclusion that it must be the result of a misdirection campaign by the CIA-controlled American media. After all, the fact that China exports more to the US than the US does to China means that by definition, more of China's economic production is dependent on the well-being of the American economy than vice-versa. And, with well over a trillion dollars in foreign exchange invested heavily in US government bonds, it is China that has the most riding on the continued stability of the American government, rather than the reverse. American commentators invent scenarios where the Chinese could hurt the American economy, which we could, but only at the cost of hurting ourselves worse. Mutual Assured Destruction is alive and well, but today it is not just a feature of nuclear strategy but a fact of the global economy.

As I Predicted, Another Diesel Emissions Shoe Drops

Back in November of 2015 I wrote:

I would be stunned if the Volkswagen emissions cheating is limited to Volkswagen.  Volkswagen is not unique -- Cat and I think Cummins were busted a while back for the same thing.  US automakers don't have a lot of exposure to diesels (except for pickup trucks) but my guess is that something similar was ubiquitous.

My thinking was that the Cat, Cummins, and VW cheating incidents all demonstrated that automakers had hit a wall on diesel emissions compliance -- the regulations had gone beyond what automakers could comply with and still provide consumers with an acceptable level of performance.

Since then Fiat-Chrysler has been accused of the same behavior, and GM has been accused as well, though only in  a civil suit.

Now, most recently, Daimler is being accused of the same behavior

Daimler has been under suspicion of cheating on US emissions tests for quite a while now -- in 2016, a number of customers even sued the automaker, claiming their cars had sneaky software made to trick testers similar to Volkswagen's. Now, according to German newspaper Bild am Sonntag, US authorities investigating the Mercedes maker have discovered that its vehicles are equipped with illegal software to help them pass United States' stringent emission tests. Citing confidential documents, the publication said Daimler's employees doubted their vehicles would be able meet US standards even before Volkswagen's diesel scandal blew up. Internal testing apparently revealed that some Mercedes models emit ten times the country's nitrogen oxide limit.

Daimler reportedly developed software with several functions to be able to trick US regulators. One called "Bit 15" was designed to switch off emissions cleaning after 16 miles of driving, while another called "Slipguard" can detect if the car is being tested based on speed and acceleration. Bild am Sonntag said it found emails from Daimler engineers questioning whether those functions were legal.

To this day, I wonder how much European officials knew about all this as it was happening.  European officials really went all-in on promoting diesel years ago as an approach to combating climate change.  This has, by the way, turned out to be a great example of the danger of government picking winners, as diesel has really turned out to be one of the worst approaches for reducing emissions in transportation vehicles, both economically and environmentally.  Never-the-less, given the big commitment by European regulators in promoting diesel as a key part of their climate change plans, I wonder how much they were looking the other way through all of this -- such that their current "shock" at all this cheating might be equivalent to Reynault's shock that there was gambling going on in Rick's Cafe in Casablanca.

Saw This Coming From A Mile Away: Russia Ads on Facebook Not Necessarily For Trump

In general, the whole Russia Facebook ad purchase story has been a huge yawner.  In an election where Hillary Clinton and her supporting PACs spent $1.2 billion and Trump spent about half that, are we really concerned about the impact of $100,000 in ad spend on Facebook?  Has there been anyone other than Russia and the Koch Brothers who the media could seriously write stories about manipulating an election by spending 0.0055% of the total advertising in the election? If that 0.0055% really turned the election, please send me the name of their ad agency.

The really interesting part of this story is that absolutely no one has said anything about that $100,000 actually having been spent on Trump.  People talk about the story as if they obviously were for Trump, but perhaps tellingly no one has actually confirmed this.  Certainly if you had asked me to guess in June of 2016 who Russia would have been making ads for, I would not have assumed Trump rather than Hillary was a sure bet.  And then there is this today from CNN

At least one of the Facebook ads bought by Russians during the 2016 presidential campaign referenced Black Lives Matter and was specifically targeted to reach audiences in Ferguson, Missouri and Baltimore, sources with knowledge of the ads told CNN.

Ferguson and Baltimore had gained widespread attention for the large and violent protests over police shootings of black men. The decision to target the ad in those two cities offers the first look at how accounts linked to the Russian government-affiliated troll farm known as the Internet Research Agency used geographically targeted advertising to sow political chaos in the United States, the sources said.

Hmmm.  I guess the apple does not fall far from the tree.  In the Cold War this is exactly the kind of thing the Soviets would have funded.  Though given how tribalized politics are I am not sure that spending money to target a political tribe to reinforce them in their already strongly-held beliefs is a super-productive way to spend money.  More to follow I am sure.

Elon Musk as Orren Boyle

First, two disclosures

  1. I am short TSLA
  2. I love the Model S.  I would love to own one.

At some level, the quality of the product is irrelevant.  They key questions are:  Does TSLA really justify a $60 billion valuation and does TSLA really deserve billions of dollars in taxpayer subsidies.

As to the first question, I will leave it up to you to research.  This is a good case for the short position.   I still think the SolarCity purchase was an absurd business decision and borderline corrupt.  The problem with shorts, especially in emotionally driven near-religion stocks like TSLA, is how long you have to hold on before the crash comes.

As for the second question, a guy who goes by the moniker of Montana Skeptic over at Seeking Alpha has been looking in to some of the larger Tesla subsidies, and the picture is not pretty.  Here is his analysis of the subsidy of the SolarCity plant in New York (SolarCity, another Musk company, was bailed out of near-bankruptcy and bought by Musk's Tesla, a smelly deal that put me on the road to shorting the company).  He tells a long, interesting story but the tl:dr is:

  • In the fall of 2014, New York State awarded SolarCity a sumptuous subsidy package: free use of the enormous Riverbend factory and $750 million of taxpayer money to refurbish and equip the factory.
  • The "Essential Purposes" of the subsidy deal were to enable manufacture and sale of Silevo's Triex technology, and then develop "next generation technology improving on the Triex product."
  • Governor Andrew Cuomo praised the deal as a visionary accomplishment "of critical importance to the United States economic competitiveness and energy independence."
  • In return for the subsidies, SolarCity promised to spend $5 billion in New York State over a 10-year period and to create 4,900 New York State jobs.
  • After the deal was signed, SolarCity's promises were noiselessly scaled back.
  • A promise that 1,460 of the jobs be "high-tech" disappeared. A promise to hire at least 900 people within two years of the factory opening shrank to 500.
  • And, SolarCity's promise to hire 2,000 solar panel installers throughout the state quietly disappeared in December 2015. It appears SolarCity knew then - two months before Elon Musk and Lyndon Rive say they had their first merger discussions - that its solar panel business was failing.
  • While SolarCity's obligations were shrinking, the factory opening was delayed. And delayed. And delayed some more. The opening is now almost two and one-half years late, with no date yet announced.
  • Meanwhile, SolarCity has abandoned the Silevo technology and taken a huge write-off on its Silevo investment.

This is the sort of reporting you almost never see in the press.  All these subsidies for business development made on promises of jobs addition.  My experience is that the resulting promises are never kept.  Why does no one ever follow these things up?

Postscript:  I have a quibble with the article on cases for shorting TSLA.  This is one part:

Until recently, TSLA has been the recipient of substantial subsidies, fawning praise and a “fanboy” following. In other words, it has received large financial benefits from various governments which were not available to its automotive peers. It’s been judged by a non-critical press, and any problems with product quality and/or delays in timelines have been readily accepted by its hardcore supporters. All of this has combined to build the quixotic narrative which justifies the sky-high valuations outlined above.

Apple has benefited from this effect for years with no sign that its cult following is diminishing.  Just wait for Apple fanboys who lose there head over whatever Apple announces for its anniversary iPhone later this year.  Prediction:  Apple will add a number of new features already found on Android phones and the press will fawn over its inventiveness and leadership.

The Progressive Left Becomes State Rights Advocates. Who'd Have Thought?

Many libertarians like state's rights because it creates 50 different tax and regulator regimes, and libertarians assume that people and businesses will flow to the most free states.  However, California progressives have discovered they like state's rights as well, though they are in more of the antebellum South Carolina category of desiring state's rights in order to be less free than the Federal government allows.

After a bid to launch a California secession movement failed in April, a more moderate ballot measure has been approved, and its backers now have 180 days to attain nearly 600,000 signatures in order to put it up to vote in the 2018 election.

The Yes California movement advocated full-on secession from the rest of the country, and it gained steam after Donald Trump won the presidential election in 2016. However, as the Sacramento Bee noted, that attempt failed to gather the signatures needed and further floundered after it was accused of having ties to Russia.

But as the Los Angeles Times reported this week:

On Tuesday afternoon, Atty. Gen. Xavier Becerra’s office released an official title and summary for the initiative, now called the ‘California Autonomy From Federal Government’ initiative.

The new measure that seeks to set up an advisory commission to inform California’s governor on ways to increase independence from the federal government. It would reportedly cost $1.25 million per year to fund “an advisory commission to assist the governor on California’s independence plus ‘unknown, potentially major, fiscal effects if California voters approved changes to the state’s relationship with the United States at a future election after the approval of this measure,’” the Los Angeles Times reported.

With Becerra’s approval, its backers can now seek the nearly 600,000 signatures required to place the measure on the 2018 ballot.

As the outlet explained:

The initiative wouldn’t necessarily result in California exiting the country, but could allow the state to be a ‘fully functioning sovereign and autonomous nation’ within the U.S.’”

According to the Attorney General’s official document on the measure, it still appears to advocate secession as the ultimate goal — even if it doesn’t use the term outright.“Repeals provision in California Constitution stating California is an inseparable part of the United States,” the text explains, noting that the governor and California congress members would be expected “to negotiate continually greater autonomy from federal government, up to and including agreement establishing California as a fully independent country, provided voters agree to revise the California Constitution.”

For the Record, I Fear Pure Majoritarian Democracy as Well

One of the themes of Nancy Maclean's new book on James Buchanan as the evil genius behind a conspiracy to unravel democracy in this county.  In critiquing her critique, I meant to also make it clear that whatever Buchanan may have believed on the subject, I am certainly skeptical of pure majoritarian democracy.  For me, protection of individual rights is the role of government, and populist majoritarianism can easily conflict with this goal (this is not a new finding, we pretty much figured this out after Julius Caesar, if not before.  Here was a piece I wrote years ago I will repeat here:

Every Memorial Day, I am assaulted with various quotes from people thanking the military for fighting and dying for our right to vote.  I would bet that a depressing number of people in this country, when asked what their most important freedom was, or what made America great, would answer "the right to vote."

Now, don't get me wrong, the right to vote in a representative democracy is great and has proven a moderately effective (but not perfect) check on creeping statism.  A democracy, however, in and of itself can still be tyrannical.  After all, Hitler was voted into power in Germany, and without checks, majorities in a democracy would be free to vote away anything it wanted from the minority - their property, their liberty, even their life.   Even in the US, majorities vote to curtail the rights of minorities all the time, even when those minorities are not impinging on anyone else.  In the US today, 51% of the population have voted to take money and property of the other 49%.

In my mind, there are at least three founding principles of the United States that are far more important than the right to vote:

  • The Rule of Law. For about 99% of human history, political power has been exercised at the unchecked capricious whim of a few individuals.  The great innovation of western countries like the US, and before it England and the Netherlands, has been to subjugate the power of individuals to the rule of law.  Criminal justice, adjudication of disputes, contracts, etc. all operate based on a set of laws known to all in advance.

Today the rule of law actually faces a number of threats in this country.  One of the most important aspects of the rule of law is that legality (and illegality) can be objectively determined in a repeatable manner from written and well-understood rules.  Unfortunately, the massive regulatory and tax code structure in this country have created a set of rules that are subject to change and interpretation constantly at the whim of the regulatory body.  Every day, hundreds of people and companies find themselves facing penalties due to an arbitrary interpretation of obscure regulations (examples I have seen personally here).

  • Sanctity and Protection of Individual Rights.  Laws, though, can be changed.  In a democracy, with a strong rule of law, we could still legally pass a law that said, say, that no one is allowed to criticize or hurt the feelings of a white person.  What prevents such laws from getting passed (except at major universities) is a protection of freedom of speech, or, more broadly, a recognition that individuals have certain rights that no law or vote may take away.  These rights are typically outlined in a Constitution, but are not worth the paper they are written on unless a society has the desire and will, not to mention the political processes in place, to protect these rights and make the Constitution real.

Today, even in the US, we do a pretty mixed job of protecting individual rights, strongly protecting some (like free speech) while letting others, such as property rights or freedom of association, slide.

  • Government is our servant.  The central, really very new concept on which this country was founded is that an individual's rights do not flow from government, but are inherent to man.  That government in fact only makes sense to the extent that it is our servant in the defense of our rights, rather than as the vessel from which these rights grudgingly flow.

Statists of all stripes have tried to challenge this assumption over the last 100 years.   While their exact details have varied, every statist has tried to create some larger entity to which the individual should be subjugated:  the Proletariat, the common good, God, the master race.  They all hold in common that the government's job is to sacrifice one group to another.  A common approach among modern statists is to create a myriad of new non-rights to dilute and replace our fundamental rights as individuals.  These new non-rights, such as the "right" to health care, a job, education, or even recreation, for god sakes, are meaningless in a free society, as they can't exist unless one person is harnessed involuntarily to provide them to another person. These non-rights are the exact opposite of freedom, and in fact require enslavement and sacrifice of one group to another.

I will add that pretty much everyone, including likely Ms. Maclean, opposes majoritarian rule on many issues.  People's fear of dis-empowering the majority tends to be situational on individual issues.

Global Warming is Killing Environmentalism

I have written many times that someday we will look back on the early 21st century and decide that the obsessive focus on Co2 and global warming gutted the environmental movements effectiveness for a generation.  While we focus on overblown fears of global warming, warming that may be more expensive to stop than it actually hurts us, real environmental problems we know how to solve go neglected.

The World Health Organization (WHO) released its first report on children's health and the environment, showing that the effects of pollution are felt most strongly by the very young. Of the deaths of children under five, a quarter are caused by smog, second-hand smoke, inadequate hygiene, unsafe water and other environmental risks. "[Young children's] developing organs and immune systems, and smaller bodies and airways, make them especially vulnerable to dirty air and water," said WHO Director-General Margaret Chan.

Much of this is sadly preventable. WHO said that 570,000 children were killed by respiratory infections like pneumonia that are attributable to second-hand smoke and indoor and outdoor air pollution, for instance. 361,000 were killed by diarrhea caused by a lack of access to clean water, sanitation and hygiene. 270,000 infants died in their first month from conditions like prematurity, caused by unclear water and air.

WHO said many deaths are caused by environmental hazards like electronic waste that exposes kids to mercury, lead and other toxins. Air pollution is another obvious problem, especially in large cities like Beijing and Paris

These are all things we know how to fix.  We are not sure how to run a growing modern economy with current technology without producing CO2, but we sure as heck know how to fix this stuff.  The global warming obsession diverts resources and attention from things we really could improve.  What is more, many of these things - like access to clean water - can only be hurt by the current environmental obsession to eliminate fossil fuel use and (among the extreme) upend market capitalism.  Economic growth and development is what tends to fix many of these problems, which certainly is not going to happen as rapidly if energy costs skyrocket.

But it is even worse.  The linked article begins with a view of polluted Paris.   How can Paris be such a mess?  I thought all we Americans were environmental Neanderthals compared to Europeans, but none of our cities look like this any more.  And France actually has the largest commitment to clean nuclear power in the world, so what is up?  One likely cause is the EU's fixation on pushing consumers into diesel cars in the name of fighting global warming.  Diesel cars produce a smidgen less Co2 per mile (because they are efficient) but also produce all sorts of pollutants that are hard to eliminate.  That picture of Paris might be labelled "Paris after obsession with global warming".

The article and report does of course mention global warming.  One of the first rules of modern environmentalism is that no negative environmental report or study can be published without blaming global warming in some way, even if there is no evidence for it.  From the same article:

Climate change is also a leading issue, since it causes pollen growth that is "associated with increased rates of asthma in children," the organization says. Between 11 and 14 percent of children under five currently report asthma issues, and around 44 percent are related to environmental exposure.

Seriously, this is what they have?  Pollen?  While 44 percent of asthma is from environmental sources, they present no evidence (because none exists) of how much asthma is from incremental pollen from  global warming.  This is so weak compared to the other problems they outline that I am amazed they can't see themselves how weak the contrast looks.  (If you were tasked to reduce asthma from manmade sources in  China, would you look at particulates in the air that create the brown clouds over Beijin or would you go after pollen from global warming?)

By the way, the Engadget article (Engadget is apparently abandoning blogging about gadgets in favor of becoming the next online MSNBC) concludes:

Unfortunately, the Republican-controlled congress and Donald Trump have rolled back environmental protections, and the White House plans to cut the EPA's budget up to 40 percent. That's a major setback for environmentalists and other activists, but the WHO report is a timely reminder of exactly for whom we need to clean things up.

Twenty years ago, the clean air and water acts enjoyed tremendous public support, even grudgingly among Republicans.  No one, even in the Left-hated Reagan Administration, ever made a serious effort to impinge on them.  However, over the last 20 years, environmentalists have overreached themselves.  Their obsession on climate and other crazy overreaches (like the Waters of the United States rules) have caused a lot of people to starting thinking all environmentalism is bullsh*t.  Yet another way the global warming obsession is undermining the environmental movement.

Postscript:  This is also the reason for my climate plan with a revenue-neutral carbon tax.  Give global warming folks what they are asking for in a very low cost way and then lets move on to fixing stuff that matters.

Accountability for Police and Why Its So Hard

The other day, in writing about how I think Black Lives Matter has lost its way, I said that I supported their goal of increasing accountability of police forces but that goal was going to take a lot of hard, nuts-and-bolts legislative and policy steps that BLM seems uninterested in pursuing.  This article from Reuters (via link from Overlawyered) gives one an idea of some of the issues that exist:

The episode is a telling snapshot of the power police unions flex across the United States, using political might to cement contracts that often provide a shield of protection to officers accused of misdeeds and erect barriers to residents complaining of abuse.

From city to city, union contracts have become just as crucial in governing departments as police manuals and city charters. Yet those contracts are coming under scrutiny amid civil rights protests over alleged police abuses, including shootings of unarmed black subjects.

Reuters, examining the fine print of 82 police union contracts in large cities across the country, found a pattern of protections afforded the men and women in blue:

• A majority of the contracts call for departments to erase disciplinary records, some after just six months, making it difficult to fire officers with a history of abuses. In 18 cities, suspensions are erased in three years or less. In Anchorage, Alaska, suspensions, demotions and disciplinary transfers are removed after two years.

• Nearly half of the contracts allow officers accused of misconduct to access the entire investigative file – including witness statements, GPS readouts, photos, videos and notes from the internal investigation – before being interrogated.

• Twenty cities, including San Antonio, allow officers accused of misconduct to forfeit sick leave or holiday and vacation time rather than serve suspensions.

• Eighteen cities require an officer’s written consent before the department publicly releases documents involving prior discipline or internal investigations.

• Contracts in 17 cities set time limits for citizens to file complaints about police officers – some as short as 30 days. Nine cities restrict anonymous complaints from being investigated.

Police and their supporters will say that Police have a particularly dangerous job and need such extra process protections.  In fact, while there are dangers, it is certainly not among the most dangerous jobs (trash collectors are twice as likely to die on the job than police).  I would argue that we give the police unique powers -- to use violence and to take away a persons liberty -- not possessed by any other citizens and thus we should expect more rather than fewer accountability provisions to go with these special powers.

I will say that I am not particularly optimistic about progress in this area.  The Right tends to fetishize police and are tend to oppose any restrictions on police.  The Left is the natural home for police reform, but most on the Left are loath to take on public employee unions, probably their strongest base of political power, and most of these changes (as seen above) require challenging the police unions.  Black Lives Matter brought a lot of focus to these issues, but they simply can't seem to get past disruption and into policy changes and legislation, and besides the group appears to have been hijacked by the Left to be a vehicle for generic protests of Progressive causes like climate change legislation.

19h Century Climate Pseudoscience: Rain Follows the Plow

After the Civil War, as settlers began to settle the drier lands of the western plains, they noticed that the low rainfall had started to increase.    In what must be some impulse programmed into human behavior, folks at the time attributed this cyclical natural variation in climate to man's actions.  The theory went that actually settling the land and overturning the sod brought more rain, encapsulated by the phrase "rain follows the plow".

The theory arose in the late 1860s and 1870s during the westward expansion of European-American settlement west of the Missouri River and across the 100th meridian west. The definition can be found in the Kansas Journey Textbook as well. This was the traditional boundary line between the humid and semi-arid portions of central North America. Specifically, in the early part of the decade, white settlement had spread into central and western Nebraska along the Platte River. Emigrants on the Oregon Trail began reporting that the land in western Nebraska, previously known for its yellowed, dry vegetation during the summer, had seemingly become green.

Out of this evidence, some scientists concluded that the apparent increase in rain was due to the settlement and the effects of cultivation. One of the most prominent exponents of the theory in the United States was Cyrus Thomas, a noted climatologist. After studying the recent history of Colorado, he concluded that the increase in moisture was permanent, and that it coincided exactly with the first settlers' cultivating of the land. Other prominent advocates of the theory were Ferdinand Vandeveer Hayden, the notedgeographer who had explored and surveyed parts of the Rocky Mountains of Colorado; Samuel Aughey, a professor at the University of Nebraska; and Charles Dana Wilber, an amateur scientist and author.

Thomas and other climatologists offered a variety of explanations for the theory. A common idea was that the plowing of the soil for cultivation exposed the soil's moisture to the sky. In addition, newly planted trees and shrubs increased rainfall as well, as did smokefrom trains, or even the metal in the rails or the telegraph wires. Another hypothesis stated that the increased vibrations in the atmosphere due to human activity created additional clouds, from which rain fell. This idea led to the widespread dynamiting of the air across the Great Plains in the 1870s.[3]

The theory was widely embraced in its day, not only by scientists, but land speculators and emigrants. Some historians have argued that the theory was embraced readily as an outgrowth of Manifest Destiny, the idea that the United States had a mission to expand, spreading its form of democracy and freedom. The theory is regarded as partially responsible for the rapid settlement of the Great Plains in the later 19th century. In 'The Great Valleys and Prairies of Nebraska and the Northwest', published in 1881, Charles Dana Wilber wrote:

In this miracle of progress, the plow was the unerring prophet, the procuring cause, not by any magic or enchantment, not by incantations or offerings, but instead by the sweat of his face toiling with his hands, man can persuade the heavens to yield their treasures of dew and rain upon the land he has chosen for his dwelling... ...The raindrop never fails to fall and answer to the imploring power or prayer of labor.[4]

William Gilpin, the first territorial governor of Colorado and an aide to President Abraham Lincoln, was a proponent of this theory. Gilpin was a strong believer in the idea of Manifest Destiny. One of his books was called The Mission of the North American People. He strongly promoted western settlement and invoked this theory as one of his reasons for people to migrate west.[5]

Climatologists now understand that increased vegetation and urbanization can result in increased precipitation. The effect, however, is local in scope, with increased rainfall typically coming at the expense of rainfall in nearby areas. It cannot result in a climatological change for an entire region. They also understand that the Great Plains had had a wetter than usual few seasons while this theory was developed and increasing settlement were both taking place. When normal arid conditions returned, homesteaders suffered

 

 

Wow, With This Level of Understanding of How Government Works, It's Hard To Believe We Struggle to Have Meaningful Public Discourse

I don't have any particular comment on the Supreme Court decision in Voisine v. United States, but I have to highlight the headline that was just shared with me on Facebook:

Another Big Win: SCOTUS Just Banned Domestic Abusers From Owning Firearms

Um, pretty sure that is not what happened.

First, convicted domestic abusers generally are already banned from owning firearms.

Second, I am fairly certain that SCOTUS did not ban anything (not surprising since they don't have a Constitutional power to ban anything).  There was some legal uncertainty in the definitions of certain terms in a law (passed by Congress and signed by the President) that restricted gun ownership based on certain crimes.  This dispute over the meaning of these terms bounced back and forth in the courts until the Supreme Court took the case and provided the final word on how the terms should be interpreted by the judicial system.

This decision strikes me as a pretty routine sort of legal result fixing a niche issue in the interpretation of terms of the law.  How niche?  Well apparently Voisine was convicted (multiple times) of "“intentionally, knowingly, or recklessly” hurting his girlfriend.  The facts of the case made it pretty clear that he was beating on her on purpose, but he argued that due to the "or" in the wording of the crime he was convicted of, as far as the law is concerned he might have only been convicted of recklessness which shouldn't be covered under the gun ownership ban.  Really, this silliness should never have reached the Supreme Court, and did (in my interpretation) only because second amendment questions were involved, questions stripped off by SCOTUS.  Freed on any Second Amendment implications, SCOTUS rightly slapped his argument down as stupid and said he was subject to the ban.  Seems sensible to me, and this sort of thing happens literally constantly in the courts -- the only oddball thing in my mind was how this incredibly arcane niche issue made it to the SCOTUS.

Instead, the article is breathless about describing this incredibly niche case as closing a "gaping loophole."  It is written as if it is some seminal event that overturns a horror just one-notch short of concentration camps  -- "This is a win for feminism, equality in the home, and in finally making movements on reigning in this country’s insane, libertarian approach to gun-owning."    And then of course the article bounces around in social media, making everyone who encounters it just a little bit dumber.

The Problem Is That We Should Not Care About "Democracy", We Should Care About Protection of Individual Rights

Perhaps this is yet another negative legacy of Woodrow Wilson and his "Making the world safe for democracy" meme.  We talk all the time about allying with and siding with and protecting democracies, but all "democracy" really means in practice (at least today) is that the country has some sort of nominal election process.  Elections are fine, they are less bad than most other ways of selecting government officials, but what we really should care about is that a country protects individuals rights, has free markets, and a rule of law.  If a county has those things, I am not sure I care particularly if they vote or pick leaders by randomly selecting folks from the phone book.

You can see this problem at work here, :

Most democratic governments – including the United States – condemned the attempted recent military coup against Turkish President Recep Tayyip Erdogan, and welcomed its failure, citing the need to respect Turkey’s “democratic” institutions. But in the aftermath, Erdogan took the opportunity to persecute his political opponents on a large scale, including firing thousands of judges who might constrain his authoritarian tendencies. Erdogan’s government was also severely undermining civil liberties long before the coup, even going so far as to pass a law criminalizing “insults” to the president, under which hundreds of people have been prosecuted. Erdogan’s own commitment own commitment to democracy is questionable, at best. He famously once called democracy a tram that “[y]ou ride it until you arrive at your destination, then you step off.”

This raises the question of whether the coup attempt against Erdogan might have been justified. More generally, is it ever justified to forcibly overthrow a democratic government? In this 2013 post, written after the successful military coup against Egypt’s radical Islamist government, I argued that the answer is sometimes “yes.” There should be a strong presumption against forcibly removing a democratic regime. But that presumption might be overcome if the government in question poses a grave threat to human rights, or is likely to destroy democracy itself by shutting down future political competition.

While we can argue if Erdogan is "committed" to democracy, I think it is pretty clear that he is not committed to the protection of individual rights.

What we need is a new alliance not to protect the world for democracy -- that word may originally have meant what I want it to mean but now it seems possible to just check the democracy box merely by having some kind of voting.  We need a new (much smaller than the UN) alliance to make the world safe for, what?  We need a name.  What do we call a country with strong protections of individual rights, free markets, and the rule of law?

Postscript:  yes, there are snarky answers to the last question, such as "increasingly rare" and "net here anymore".

Home Ownership and Labor Mobility

Alex Tabarrok discusses some academic work that shows a declining inter-regional mobility in the United States which is causing local economic declines to last much longer than they used to last.

In a new paper, also cited by Leubsdorf, Danny Yagan at Berkeley suggests that reduced migration is only part of the problem. What has made the aftermath to the 2008-2009 recession so bad is that migration is low at the same time that it has become more necessary than ever. The 2008-2009 recession was especially localized, it hit some places harder than others and in a way that appears to be permanent. But migration has been too slow to solve the problem.

The usual story is that in-and-out migration equalizes wage, unemployment and employment rates across the nation. Some places may be harder hit than others but movement quickly makes the US into one labor market. In the aftermath of this recession, however, that isn’t happening for employment rates. Using a clever research design that looks at workers with similar education and skills doing the same jobs at the same large firms but in different locations, Yagan finds that location continues to matter years after the recession has ended. Workers who worked in the places hardest hit in the 2007-2009 recession have employment rates today that are 1% lower than similar workers in regions that were less hard hit.

It is probably unfair for me to comment on this because I have been highly mobile in  my life, having lived and worked in about 10 places as diverse as Houston, Dallas, Boston, Boulder, Seattle, Phoenix, St. Louis.  However, I will take  a shot at this.  Some of my hypotheses:

  1. Government programs to encourage home ownership have reduced mobility.  It is simply harder to move if one has a house to sell, and this was worse in the last recession, which was driven in large part by falling home prices, which made it even harder to move when one has an underwater home to sell.
  2. Political/Cultural redlining reduces mobility.  As an example, certain millennials want to be nowhere else but San Francisco, despite how absurdly hard it is to live there.  They will starve in poverty there before going to, say, Houston, which is an easy place to live when one is young but which many consider to be a evil redneck backwater.
  3. Use of Communication technology causes people to think they can reduce mobility when they perhaps can't.  I think a lot of folks with modern communication technology assume that location is irrelevant and that they should be able to do X work anywhere they want.   I think they are overestimating where many industries and companies are right now (though they may be correct in the future).  Just from tax compliance and regulatory perspectives, it is pure hell for a company in, say, Texas to have an employee in, say, California.  Plus I think there are still real networking and management reasons for employees to be concentrated in facilities.

 

The Electric Vehicle Mileage Fraud Update: Singapore Figures It Out

Long-time readers know that while I have no particular problems with electric cars, I do think that the EPA uses fraudulent standards for evaluating the equivalent fuel economy or MPGe of electric vehicles.  In short, the current Obama standard ignores the previous Clinton-era methodology and creates a crazy new standard that assumes fossil fuels are burned with perfect efficiency when making electricity.  Most of my readers (but perhaps few Obama voters) will understand this assumption to be absurd.  The result is, as discussed here in Forbes, that the current MPGe numbers for electric vehicles are overstated by a factor of 3 (specifically you need to multiply them by 36.5% to get the correct equivalent amount of fossil fuels that must be burned in the power plant to power the electric car).  When this correction is made, cars like the Nissan Leaf are good (but not as good as a Prius) and cars like the old Fiskers Karma get worse mileage than a SUV.

As I wrote in the article on the Karma,

...electric vehicle makers want to pretend that the electricity to charge the car comes from magic sparkle ponies sprinkling pixie dust rather than burning fossil fuels. Take this quote, for example:

a Karma driver with a 40-mile commute who starts each day with a full battery charge will only need to visit the gas station about every 1,000 miles and would use just 9 gallons of gasoline per month.

This is true as far as it goes, but glosses over the fact that someone is still pouring fossil fuels into a tank somewhere to make that electricity.  This seems more a car to hide the fact that fossil fuels are being burned than one designed to actually reduce fossil fuel use.  Given the marketing pitch here that relies on the unseen vs. the seen, maybe we should rename it the Fisker Bastiat.

Well, congrats to Singapore.   They seem to have figured out what the US hasn't :

In the United States, motorists who buy a new Tesla Model S are eligible for an array of federal and local tax breaks because the all-electric sedan is considered a zero-emissions car. The story is different in Singapore, however, where the nation’s first Model S owner just found out his car is subject to heavy taxes because it’s lumped in the same category as some of the dirtiest new cars on the market.

Joe Nguyen explains he spent seven months trying to import a Model S that he bought in Hong Kong to his home in Singapore. The government’s Carbon Emissions-based Vehicle Scheme (CEVS) rewards motorists who import a used eco-friendly car with a roughly $11,000 tax break, but Nguyen was slapped with an $11,000 fine based on the conclusion that the S uses too much electricity.

“I don’t get it, there are no emissions. Then they send out the results from VICOM, stating that the car was consuming 444 watt hours per kilometer. These are not specs that I have seen on Tesla’s website, or anywhere else for that matter,” explained Nguyen in an interview with Channel NewsAsia.

A spokesperson for Singapore’s Land Transport Authority (LTA) said the fine is fair and completely justified.

“As for all electric vehicles, a grid emission factor of 0.5 g CO2/Wh was also applied to the electric energy consumption. This is to account for CO2 emissions during the electricity generation process, even if there are no tail-pipe emissions,” wrote the spokesperson in a statement. The LTA added that it had never tested a Model S before it received Nguyen’s car.

That means that, under Singaporean regulations, the Model S falls in the same emissions category as cars with an internal combustion engine that emits between 216 and 230 grams of CO2 per kilometer. In other words, it’s about as eco-friendly a high-performance, gasoline-burning models like the Audi RS 7, the Mercedes-AMG GT S, and the Porsche Cayenne S.

Actually, the US DOE does in fact publish electricity usage in watts per mileage driven.   They list numbers in the range of 38 KwH per 100 miles for the Model S, which would be about 238 watt hours per kilometer, so such numbers exist though Singapore thinks the car is less efficient than does Obama's DOE.  By my calculation the true MPGe (if the DOE's electric efficiency numbers are trustworty) of the car should be around 32, which is good for a large performance car (and well better than the competitive cars cited) but probably not lofty enough to deserve a subsidy.  Singapore's calculations that the Model S is as dirty as these cars on a CO2 emissions basis may still be correct even if it is more efficient if most of Singapore's electricity is produced by coal.

On Immigration, Conservatives Sound Just Like Socialists

The other day John Hinderaker of Powerline wrote:

If someone proposes that next year we should import 10,000 unskilled immigrants from Pakistan, the first question we should ask is: why do we need them? But that is the one question that no one ever seems to pose.

This is a terrible question and to my eye shows just how close Conservatives come to accepting many of the assumptions of Socialism.

Socialists seldom think in terms of individuals, but instead talk about the economy as some great big machine that they get to run.  We all remember Bernie Sanders saying

“You don’t necessarily need a choice of 23 underarm spray deodorants or of 18 different pairs of sneakers when children are hungry in this country”

When Hinderaker is asking if we need more immigrants, or Sanders is asking if we need more deoderant choices, they are both working from an assumption that some authoritarian gets to sit at the top and make these choices for us.

The question "do we need immigrants" is actually senseless. Who is "we"? Who gets to make decisions for "we"? Only a socialist thinks this way. In a free society, the questions that matter are "Do I want to hire this immigrant?" or, as an immigrant, "do I want to take the chance of moving to an unfamiliar country to try to better my life." If I wish to hire someone from another country and they wish to move here and take the job, what the hell does it matter if John Hinderaker thinks this person is "needed"? I have decided I need a certain immigrant for my business, and the immigrant has decided that moving here is a good tradeoff for him.  In capitalism, that should be a done deal.

Could the immigrant or I be wrong about my employment offer being a good idea? Sure.  But authoritarian government second-guessing of individual decisions is supposed to be a progressive-socialist game, and here is a prominent Conservative doing exactly the same thing.  If Bernie Sanders wanted to require me to get government permission to produce a new flavor of deodorant, Hinderaker would be outraged.  But never-the-less he similarly wants me to get government permission (actually he wants to deny me government permission) to hire the employee I want to hire.

All this "Amercan jobs for Americans" thing may sound nice, and get head nods at the local Rotary, but what it actually means is that individual business people like myself have to be limited to hiring from a government-approved list.  Doesn't sound much like the free markets and small government Conservatives claim to want.

Hinderaker quotes approvingly from David Frum

However one assesses [the Farook family] chain and its consequences, it seems clear that the large majority of legal immigrants choose to come—or, more exactly, are chosen by their relatives—for their own reasons. They are not selected by the United States to advance some national interest. Illegal immigrants are of course entirely self-selected, as are asylum seekers. …

Donald Trump’s noisy complaints that immigration is out of control are literally true. Nobody is making conscious decisions about who is wanted and who is not, about how much immigration to accept and what kind to prioritize—not even for the portion of U.S. migration conducted according to law, much less for the larger portion that is not.

Doing things for one's own reasons.  Self-Selection.  Lack of government control.  Lack of government decisions about who or what is wanted.  Lack of national priorities.  These all sound like ... capitalism and a free society.   Replace the word immigration with any other term and Conservatives would blast these two sentences and Bernie Sanders and Barack Obama would vigorously nod.  I could write a $15 minimum wage screed using almost these identical words from Frum.    Here, let me try:

However one assesses [the John Smith] $8 wage and its consequences, it seems clear that the large majority of employers set wages for their own reasons. These wages are not set by the United States to advance some national interest. The wage rates are entirely self-selected by employers and employees.

Bernie Sanders's noisy complaints that wage rates and income inequality are out of control are literally true. Nobody in government is making conscious decisions about who is hired and for how much, about how much income to accept and what kind to prioritize.

Postscript:  Yes, I know that Conservatives are all worked up because 1 in a 1,000 or so of our immigrants might be murderers.  You know what, one in a thousand Americans born every day will likely grow up to be murderers, but we don't ban sex.  We accept the consequences that we get a few bad apples along with a lot of awesome productive people.

I would also ask Conservatives this -- why don't you think the Left's desire to ban gun ownership to head off mass shootings is fair?  I would suggest one reason is that it is unfair to ban legal gun ownership for 1,000 good people because one will use their gun to commit a murder.  If you agree with this statement, explain why your argument against immigration is different from the Left's call to ban gun ownership.

Dispatches from the Crony State

From the Daily Beast

For some wealthy donors, it doesn’t matter who takes the White House in 2016—as long as the president’s name is Clinton or Bush.

More than 60 ultra-rich Americans have contributed to both Jeb Bush’s and Hillary Clinton’s federal campaigns, according to an analysis of Federal Election Commission data by Vocativ and The Daily Beast. Seventeen of those contributors have gone one step further and opened their wallets to fund both Bush’s and Clinton’s 2016 ambitions.

After all, why support just Hillary Clinton or just Jeb Bush when you can hedge your bets and donate to both? This seems to be the thinking of a group of powerful men and women—racetrack owners, bankers, media barons, chicken magnates, hedge funders (and their spouses). Some of them have net worths that can eclipse the GDPs of small countries.

Ideology, policy prescriptions, legislative plans -- nothing matters except influence.  This will always happen as long as we give politicians so much power.  Its why the Coke and Pepsi party look so similar today.   At least a few people are noticing:

Is there a single person alive who believes that corporations, trade associations, NGOs, unions, and the like pay the Clintons enormous sums for speeches because they believe their members actually want to hear the Clintons say the same tedious talking points they have been spewing for years? If that were the only value received no profit-minded enterprise would pay the Clintons these vast fees because they would earn, well, a shitty rate of return.

No, the Clintons are not paid to speak. Businesses and other interest groups pay them for the favor of access at a crucial moment or a thumb on the scale in the future, perhaps when it is time to renew the Ex-Im Bank or at a thousand other occasions when a nod might divert millions of dollars from average people in to the pockets of the crony capitalists. The speaking is just a ragged fig leaf, mostly to allow their allies in the media to say they “earned” the money for “speaking,” which is, after all, hard work.

We have such people as the Clintons (and the tens of thousands of smaller bore looters who have turned the counties around Washington, D.C. in to the richest in the country) because they and their ilk in both parties have transformed the federal government of the United States in to a vast favors factory, an invidious place that not only picks winners and losers and decides the economic fates of millions of people, but which has persuaded itself that this is all quite noble. Instead, the opposite is true: This entire class of people, of which the Clintons are a most ugly apotheosis, are destroying the country while claiming it is all in the “public service.” It is disgusting. We need to say that, at least, out loud. . . .

Tear down the aristocracy of pull. This may be our last chance.

Ultimate Proof Green Energy is About Cronyism, Not the Environment

Government green energy programs are supposedly about subsidizing new energy technologies to reduce their cost and increase their adoption rate.  But it appears to me that they are in fact merely about subsidizing favored companies.

Why?  Well consider this:

Over the last couple of years, trade remedy actions on clean energy products have intensified. In the wind industry, the Wind Tower Trade Coalition, an association of U.S. producers of wind towers, brought an AD/CVD complaint against imported wind towers in 2011. The U.S. Commerce Department started an investigation, and announced a preliminary decision in December 2012.

This decision found both subsidization and dumping in relation to Chinese imports and imposed an antidumping tariff of between 44.99% and 70.63%, as well as countervailing duties of 21.86%–34.81%. The Commerce Department also established a separate antidumping duty of 51.40%–58.49% on Vietnamese wind tower manufacturers.

In the solar industry, in October 2011, the Coalition for American Solar Manufacturing, a group of seven U.S. solar panel manufacturers led by Solar World Industries America, accused Chinese solar panel companies of dumping products in the United States. The Commerce Department opened an investigation in 2011 and announced the final ruling in 2012. The decision was to impose antidumping tariffs ranging from 24% to 36% on Chinese producers.

All of those actions are not only not consistent with reducing the cost of new energy technologies, they actually raise the cost of wind and solar.  The only benefit of these actions is to improve the bottom line of crony-connected green energy companies.  There is no reason to believe that this cronyism is not the real rational behind the whole program.   If government subsidizes consumer solar purchases 30% and then raises solar panel costs by 30%, they are not making the technology cheaper for consumers, but just finding an excuse to pour tax money into the pockets of a few folks like Elon Musk.

Government Is Spending Millions to Rush To the Front of the Parade

From Shawn Regan at PERC, via Arnold Kling

Last year, riding the buzz over dying bees, the Obama administration announced the creation of a pollinator-health task force to develop a “federal strategy” to promote honeybees and other pollinators. Last month the task force unveiled its long-awaited plan, the National Strategy to Promote the Health of Honey Bees and Other Pollinators. The plan aims to reduce honeybee-colony losses to “sustainable” levels and create 7 million acres of pollinator-friendly habitat. It also calls for more than $82 million in federal funding to address pollinator health.

But here’s something you probably haven’t heard: There are more honeybee colonies in the United States today than there were when colony collapse disorder began in 2006. In fact, according to data released in March by the Department of Agriculture, U.S. honeybee-colony numbers are now at a 20-year high. And those colonies are producing plenty of honey. U.S. honey production is also at a 10-year high.

The White House downplays these extensive markets for pollination services. The task force makes no mention of the remarkable resilience of beekeepers. Instead, we’re told the government will address the crisis with an “all hands on deck” approach, by planting pollinator-friendly landscaping, expanding public education and outreach, and supporting more research on bee disease and potential environmental stressors.

I am sure the government, once they have had some bureaucrats running around filing reports and plans for a few years will soon claim credit for the improvement.  My prediction:  This agency will still be here 50 years from now.  You can never kill these things once created.  This is only slightly less irritating than politicians who claim that they "created X million jobs" when in office, but only slightly.

Update:  Another very similar example:  transfats.

The Food and Drug Administration recently moved to eliminate trans fats from the American diet, and food activists and the public-health lobby are claiming a historic victory. Yet this is a rare case of the Obama Administration regulating from behind. Markets had as much to do with the fall of trans fats as government did with their rise.

The FDA’s first restrictions on the use of partially hydrogenated oils as a major source of trans fats in processed foods—think Crisco shortening—give food makers three years to phase out the substance. Evidence began to accumulate in the early 2000s that trans fats were connected to bad cholesterol and cardiovascular diseases. Shoppers and diners concerned about health risks soon started to revolt against the fried and baked goods and the fast-food fare where they were prevalent.

Lo and behold, the food industry responded by changing their recipes and eliminating the oils from some 86% of their products. Trans fat consumption plunged by 78% over a decade, according to the FDA’s estimates, and is now well below the two grams per day that the American Heart Association says is the safe upper limit. The rare survivors of this purge are niche foods like microwave popcorn, frozen pizza and chocolate sprinkles, where trans fats are useful for improving taste and texture.

Dear Paul Krugman: Please Explain Labor Demand Elasticity in Puerto Rico

Paul Krugman and a surprisingly large portion of Leftish economists have staked out a position that labor does not act like any other commodity, such that higher minimum wages have no effect on demand.  I have had people on the Left tell me that this absurd, common-sense-offending position is actually "settled".  So explain Puerto Rico:

Another problem is that just 40 percent of the population [of Puerto Rico] has a job—or is even looking for one. That figure has plummeted in recent years. In the United States as a whole, it is 62.9 percent....

The report cites one surprising problem: the federal minimum wage, which is at the same level in Puerto Rico as in the rest of the country, even though the economy there is so much weaker. There are probably some people who would like to work, but because of the sickly economy, businesses can't afford to pay them the minimum wage.

Someone working full time for the minimum wage earns $15,080 a year, which isn't that much less than the median income in Puerto Rico of $19,624.

The report also cites regulations and restrictions that make it difficult to set up new businesses and hire workers, although it's difficult to know just how large an effect these rules might or might not have on the labor market.

By the way, the fact that the author thinks this is "surprising" just goes to show how far this anti-factual meme of a non-sloping labor demand curve has penetrated.

As pointed out in several places today, Puerto Rico has a surprising number of parallels to Greece.   It seems to have zero fiscal restraint, it has structural and regulatory issues in its economy that suppress growth, and has its currency pegged to that of a larger, much richer nation.  It is apparently facing a huge $70+ billion potential debt default.

Why Remove Hamilton Instead of Jackson?

Apparently, it is Hamilton that will get the ax on the $10 bill rather than Jackson on the $20 in order to make way for some fresh historical faces.  I am not the biggest Hamilton supporter in the world, and he was never a President, but he had as much to do with the form our Constitution takes today as any man in history.  On the other hand, for whatever points Jackson might make with me by opposing the Bank of the United States, he was really a horrible person.  His attitude about blacks and his treatment of slaves represented the worst of the slave-holding South, his his ruthless role in wiping out of the Cherokee nation is beyond criminal.

To this day, I don't know how the conflict between nomadic Native Americans and European settlers looking to build towns and farms could ever have had a happy ending.  But the one exception to this was the Cherokee, who settled down in communities in Georgia that in most ways mirrored European communities in the rest of the early United States.  If there are any native americans we should have been able to integrate into American society, it was the Cherokee.   And we wiped them out.  Awful.  I would rather the $20 bill be blank than have that genocidal maniac on it.

PS- would love to see someone like Harriet Tubman on the money, or really anyone else whose contribution did not consist merely of exercising power over me.  Hell, put Steve Jobs on there -- the iPad, and the Apple II before it, have improved my happiness more than any politician.

Currency Manipulation

One of the critiques of any trade deal of late is that there should be penalties for countries guilty of "currency manipulation."  The concern is that countries will devalue their currency in an effort to make their own exports cheaper to other nations while making it harder for other countries to export back to them.  As an example, if the Chinese were to do something that cuts the value of the Yuan in half vs. the dollar, their products look very cheap to American consumers while American-produced goods suddenly look a lot more expensive to Chinese consumers.

I have two brief responses to this:

  1. I find it hilarious that anyone in the United States government, which has a Federal Reserve that has added nearly $2 trillion to its balance sheet in the service of cramming down the value of the dollar, can with a straight face accuse other nations of currency manipulation.  In practice in today's QEconomy, currency manipulation means another country is doing exactly what we are doing, but just doing it faster.
  2. As an American consumer, to such currency manipulation by other countries I say, Bring it On!  If China wants to hammer its own citizens with higher prices and lower purchasing power just to subsidize lower prices for me, I am happy to let them do it.  Yes, a few specific politically-connected export businesses lose revenues, but trying to prop them up is pure cronyism.  Which is one reason I think Elizabeth Warren is a total hypocrite.  The constituency of the poor and lower middle class she presumes to speak for are the exact folks who shop at Walmart and need very price break on everyday goods they can get.  Senator Warren's preferences for protectionist trade policies and a weak dollar will hurt these folks the most.

Is The Left Finally Starting to Question Light Rail?

This is the first even mild questioning of light rail I have seen, and it is certainly welcome.  It even acknowledges that the sole advantage of light rail over much more flexible and less expensive buses is that it is more appealing to the middle and upper classes.  Via Kevin Drum:

Josh Barro thinks our cities are building too much light rail. It's expensive, often slow, and offers virtually no advantage over simply opening up a bus line. The problem, according to a 2009 report from the Federal Transit Administration, is that "Bus-based public transit in the United States suffers from an image problem."

 

 

Sorry, But All You Internet Users Appear to Be Idiots

I am just amazed at how many otherwise smart people are rooting for the government to regulate the Internet:

According to a pair of new reports from the Wall Street Journal and the New York Times, the FCC chairman Tom Wheeler will soon do what some net neutrality advocates have been clamoring for for ages: Try to officially reclassify internet service as a telecommunications service under Title II of the Telecommunications Act. That'd effectively put internet access in the same bucket as landline telephone service, which is treated as a public utility in the United States, and would basically ban the paid prioritization of certain web sites and services over others....

We -- along with many of you -- will be watching the outcome of that vote with bated breath. For that matter, so will representatives and head honchoes of the country's internet service providers. A vote in favor of reclassification means that all of those companies will eventually have to deal with way more intense regulatory scrutiny, and do away with plans to treat some web-centric companies with deep pockets as first-class citizens of the internet while the rest of us wait longer for other stuff to load.

So, out of the fear in the last sentence, that some people will get better service than others -- something that, oh by the way, has never really happened so is entirely hypothetical -- you are urging on a regulatory regime originally designed for land-line phone companies, a technology that basically went unchanged for decades at a time.  The phones that were in my home at my birth in 1962 were identical to the one in my dorm room when AT&T was broken up in 1982.  Jesus, we are turning the Internet into a public utility -- name three innovations from an American public utility in the last 40 years.  Name one.

And all you free-speech advocates, do you really think the Feds won't use this as a back-door to online censorship?  We are talking about the same agency that went into a tizzy when Janet Jackson may have accidentally on purpose shown a nipple on TV.  All that is good with TV today-- The Sopranos, Game of Thrones, Arrested Development, etc. etc. etc. results mainly from the fact that cable is able to avoid exactly the kind of freaking regulation you want to impose on the Internet.

Here is my official notice -- you have been warned, time and again.  There will be no allowing future statements of "I didn't mean that" or "I didn't expect that" or "that's not what I intended."   There is no saying that you only wanted this one little change, that you didn't buy into all the other mess that is coming.   You let the regulatory camel's nose in the tent and the entire camel is coming inside.  I guarantee it.

Update:   Apparently the 1934 Telecommunications Act imposes a legal obligation on phone carriers to complete calls no matter who they are from.  Sounds familiar, huh?  Just like net neutrality.  It turns out this law is one of the major barriers preventing phone companies from offering innovative services to block spam calls.