30 April 2012

Book Review

Unnatural Selection by Mara Hvistendahl

This book has seen the future, and it is not pretty.  The explosion of scientific research has better enabled sex determination in utero, and has reduced the health risks of abortions.  These scientific advances, when coupled with government population control policies (think: China’s one child program) have led to the following scenario:  many women, once they find out they are pregnant, are going to doctors to see if they are going to have a boy or girl; if they are expecting a girl, there is a good chance they will “terminate” the pregnancy.

As can be imagined, Unnatural Selection is a very depressing read.  It is chock full of shocking examples of the sex trade, abuse of women, and doomsday predictions about the nasty effects of a world full of men.
Hvistendahl starts out by noting an apparent paradox:  the population of women, as a percentage of the population as a whole, has declined in correspondence to increases in women’s rights (as an aside, this would most certainly include the right to an abortion).  The merited conclusion, however, is not drawn:  women, once given rights, will apparently use them self-destructively.  This, incidentally, is not mere theory or simple misogyny, but rather the plain and simple reality of the last forty years of history.  Quite simply, when given the ability and permission to select the sex of their child, women prefer having boys to having girls.

Of course, this matter wasn’t helped any by the United States’ interference into foreign affairs.  Assholes (and frankly, I can think of no better term) like Paul Ehrlich spent the better part of the 1960s and 70s predicting a Malthusian population explosion—which was never realized, by the way—and in turn called for strict population controls to prevent the supposed problem of overcrowding.  Of course, these controls were to be enacted in poor foreign countries instead of in the wealthy Western countries where the proponents of population control resided.  This led the United States to spend billions of dollars to basically subsidize the murder of unborn foreign children, in the name of saving the planet, of course.  By extension, this means that the US also subsidized sex-selective abortions as well, contributing to the current global gender imbalance.  In fairness, the US was not the only country responsible for this mess (many Communist countries were only too happy to receive American money for something they wanted to do anyway), but the US does play a rather dominate role in creating this mess, particularly through the 70s and 80s.

From there, the book goes on to detail the rather nasty after effects of the current gender imbalance.  Because men have a very strong desire for sex, it is generally a good idea to make sure that they have access to it.  This has led to a couple of different solutions.  In wealthier nations, and in wealthier provinces of poorer nations, there are many men who simply purchase brides, which usually means purchasing women from poorer countries or provinces.  Of course, this has a market distortive effect in the poorer provinces and countries, and so men there tend to form gangs wherein they go about kidnapping women and forcing them into prostitution.  At least the world doesn’t have to worry about overpopulation anymore.

The unspoken, and perhaps unconscious themes of the book appears to be twofold.  First, the book dwells a bit on how pure science is mostly used for evil.  Second, the book dwells on how feminism has, by and large, made women worse off.

The former theme is especially interesting, since it would imply that there are many questions that man is simply better off not asking, let alone answering.  In fact, science ultimately plays into man’s fatal conceit—the pride of life—by causing man to think that he can control the world simply by applying his knowledge.*  And so man, in his pride, attempts to reorder the world according to his fanciful theories, using his knowledge to ever so slightly tweak the future.  What man is unable to comprehend, though, is that there are often consequences that cannot be anticipated.  Thus, the fatal conceit of science is laid bare, and it becomes obvious that ignorance is truly bliss, for with knowledge comes the desire to tinker, and with tinkering comes the consequences of destroying the natural order of things.

The latter theme is also interesting, even though it is obvious.  Women, for whatever reason, are apparently incapable of handling power in a positive manner, for the benefit of not only others, but for themselves as well.**  It is no surprise that women do not look out for men, and now it is undeniable that women can’t even be trusted to look out for other women.  But this should come as no surprise to anyone that ever went to school.

In spite of all this, there is some hope for the future.  The miserable results of sex-selective abortions are started to be countered, especially by pro-life groups.  Not only that, the current shortage of women has increased their market value (in some cases, this is meant in a literal sense), which has encouraged more parents to have more daughters.  This suggests that the problem will solve itself eventually, assuming the technocrats stop their tinkering.  On a negative note, the shortage of women is linked to increased violence among young males that live in highly sex-imbalanced societies.  These men will, for the most part, end up fighting and possibly killing each other, which will help to reduce the sex imbalance.  However, it’s sad that it ever had to come to this.

This book is a highly recommended read.  Its historical perspective and sociological predictions make this book well worth its purchase price.  It’s an informative and eye-opening, albeit somewhat depressing read that’s best handled in small doses.  If the future seems especially bleak to you, this book will help to explain why.

* The word “science” comes from the Latin word scientia, which means “knowledge.”

** In case there are any obtuse people, this is a general statement.  It should go without saying that NAWALT.  However, the inverse of that statement should also go without saying.  Namely, that most women are like that.

29 April 2012

Consumer Demand is Not the Whole Picture

See if you can spot what’s missing:

Businesses aren’t investing in the United States because of a lack of consumer demand, International Paper CEO John Faraci said Friday.
“I think this was all about consumer spending and demand. You know, the problem we have is there’s inadequate demand to create jobs. We know how to respond when there is demand,” he said on CNBC’s “The Kudlow Report.”
The U.S. Commerce Department estimated that gross domestic product expanded at a 2.2 percent annual rate in the first quarter, falling short of analysts’ expectations it would grow 2.5 percent and slowing down from the fourth quarter’s 3-percent rate.

The more correct way of saying this is that there is a lack of consumer demand for products at profitable prices.  There is plenty of demand for cheap goods (for example, imagine what would happen to iPad sales if the price dropped to $150 each).  The problem is that cheap goods often have very thin profit margins.

Also overlooked in this admittedly shallow Keynesian market analysis is that purchasing power has declined.  It’s not that demand has disappeared or necessarily reduced (who doesn’t want stuff?); it’s that people don’t have the ability to act on their demand.  Put plainly, people don’t have money, regardless of whether we’re talking cash or credit.

Thus, saying that demand has declined is a rather shallow way of addressing the problem and thus begs a shallow solution (quantitative easing, e.g.).  The deeper issue is that people’s real income has declined, alongside their ability or willingness to use credit to purchase things.  Therefore, the proper solution is not a short-term stimulation of demand, but rather an attempt to fix the structural flaws that have caused a decline in real income.  The causes for such a decline are various:  free labor, inflation, free trade, and so on.  Fixing these things won’t be easy—in fact, they’ll be quite painful in the short-term—but they will lead to a long-term fix.  Unlike a stimulus.

Clean Water

Here’s a summary of a new research paper that claims the government regulation has had positive effects on the environment:

Levels of copper, cadmium, lead and other metals in Southern California's coastal waters have plummeted over the past four decades, according to new research from USC.
Samples taken off the coast reveal that the waters have seen a 100-fold decrease in lead and a 400-fold decrease in copper and cadmium. Concentrations of metals in the surface waters off Los Angeles are now comparable to levels found in surface waters along a remote stretch of Mexico's Baja Peninsula.
Sergio Sañudo-Wilhelmy, who led the research team, attributed the cleaner water to sewage treatment regulations that were part of the Clean Water Act of 1972 and to the phase-out of leaded gasoline in the 1970s and 1980s.

Three questions that spring readily to mind are:  1) is this correlation or causation?  2) Are there free market alternatives that could have attained similar results?  3) Does this prove, carte blanche, that all government regulation of the environment is similarly beneficial?

Regarding the first question, it’s difficult to answer clearly from the synopsis of the paper.  The lead regulations seem like they would generally contribute to decreases in lead content in the ocean, for lead particles would be in the water vapor that is a by-product of burning automotive fuel.  This lead would then enter the oceans from the atmosphere.  It’s not so clear with the other metals, so it might be possible that these levels had begun to decline prior to the introduction of regulation (much like how automobile fatalities had begun to decline prior to seatbelt laws).  At any rate, it seems likely, though it is not conclusive from the summary, that the environmental regulation worked.

Regarding the second question, it’s difficult to say that government interference is necessary when it would be possible to establish property rights on the coastal waters that were polluted.  Under a system of private property rights, owners of said property—in this case the ocean—would be able sue those who polluted (i.e. altered and damaged) their property. As such, it would fallacious to use this study as proof that the government regulation is necessary for environmental protection.  Governmental regulation may be efficacious, but that is not the same as saying that it is necessary.

Regarding the third question, it seems obvious that many environmental regulations are misguided, to say the least, and often counterproductive.  As such, it does not necessarily follow that one effective, or even necessary, set of environmental regulation proves that all sets of environmental regulations will be similarly effective and necessary.  Stated another way, it dangerous to extrapolate a trend from a single data point.

The conclusion to be drawn from this study is that there appears to be one instance where governmental regulation yielded positive results.  Of course, this regulation was necessary because of a prior failure (i.e. the non-allowance and/or enforcement of property rights), but nonetheless the government did something useful.  However, trying to prove that governmental regulation is universally necessary and effective from this single data point seems rather ludicrous, particularly in light of government’s other failures.

I'm Back!

I’ve been pretty busy with work the past couple of weeks, which is why my posting has been sporadic.  I’ll be trying to catch up on my backlog of writing projects, which will likely lead to stretches of several posts a day followed by stretches of nothing.  Since the internet hangs on to my every word, I thought I’d give it a heads up.

I’ve also been pretty preoccupied with music for the last three weeks.  In particular, I’ve been obsessed with playing guitar and writing songs.  This has led to me writing, among other things, a hymn called “All Ye Blest Creation,” which is available for free at Scribd.

I’ve also updated the blogroll to include Captain Capitalism (which is a cool moniker) and Michael Hall.  I would also like to remind everyone of Victor Delmente’s blog.  If you haven’t bookmarked them or added them to your RSS feed manager, you should.  Also, check out Incendiary Insight, written by DW.  It’s a good blog, as evidenced by this post, among others.

And now back to our regular posting.

28 April 2012

A Most Magnificent Speech

From one Robert Wenzel:

I will now give you more warnings about the economy.
The noose is tightening on your organization, vast amounts of money printing are now required to keep your manipulated economy afloat. It will ultimately result in huge price inflation, or,  if you stop printing, another massive economic crash will occur. There is no other way out.
Again, thank you for inviting me. You have prepared food, so I will not be rude, I will stay and eat.
Let’s have one good meal here. Let’s make it a feast. Then I ask you, I plead with you, I beg you all, walk out of here with me, never to come back. It’s the moral and ethical thing to do. Nothing good goes on in this place. Let’s lock the doors and leave the building to the spiders, moths and four-legged rats.

And let the people say amen.

[Hat tip: Vox.]

19 April 2012

Public Goods

Let’s play spot the fallacies:

We do not just have governments in order to rob Peter to pay Paul. We have governments because there are things they can provide that the private sector is either unable or unwilling to provide effectively - courts, police, schools, roads, other infrastructure, etc. Conservatives focus so much on redistribution that they tend to ignore this fact, but if you think about it, you'll realize public goods are why we have government in the first place. [Emphasis added.]

I will cede that the court system is best administered by the government, given its coercive touch.  However, the idea that there is no way the free market can provide policing, education, roads, and other infrastructure is simply foolish.

Regarding policing, consider that private investigators and voluntary constabularies have both played major roles in law enforcement for a decent portion of American history (with the former still in existence).  Of course, there is not likely to be any free market policing of victimless crimes, like speeding and drug use, but I don’t see this as a down side, seeing as how the negative externalities of these laws as the relate to property rights are already handled by the law.

Regarding education, it is laughable to claim that the free market can’t provide schooling in light of the present existence of private schools, private universities and colleges, and home schooling.  While a free market model would increase the probability that people would have to pay directly for education instead of soaking other people for the costs via taxation, this will encourage more efficiency and lower costs in the long run (and, let’s be honest, the current results of the modern public school system are simply abysmal), and will likely end the public-school-as-free-daycare model of education that currently plagues society today.

Regarding private roads, I will simply note that privatized highways currently exist, and that there have been many cases of privately funded roads.  In fact, the modern road system was initially built on private financing from businesses.  Furthermore, it is quite conceivable that the free market can provide lots of infrastructure.  Sure, it might be more expensive, given the market tendencies of those entities known as natural monopolies, but this will likely help conserve resources and distribute them more equitably over time.

What’s also ignored in this “analysis” is the crowding effect that the government plays in competition for these services.  For example, the government providing education at no cost to it recipients (or, more accurately, their parents) makes it considerably more difficult for other companies to compete since they cannot coerce people to buy their product.  Really, once one accounts for the competition-distortive effects of government, it should become readily apparent that the claim that the market is unwilling to provide certain things, and thus the government must is simply wrong.  Whether this claim is made in ignorance, malice, or plain stupidity is for the reader to decide.

18 April 2012

Republican Hypocrisy


This is no doubt how Mitt Romney and other wealthy people would like the public to see the debate. However the reality is that the government has implemented a wide range of policies that have led to a massive upward redistribution of before tax income over the last three decades. These policies have affected every corner of the market economy.
Just to take a few biggies, the fact that drugs are expensive is entirely due to government-granted patent monopolies. We spend about $300 billion a year on drugs that would cost less than$30 billion a year in a free market. The difference of $270 billion a year is close to 5 times what is at stake in extending the Bush tax cuts to the richest 2 percent of the taxpayers. (There are alternative mechanisms for financing drug research.)

If Republicans, and conservatives, are going to complain about welfare costs, they would do well to take a close look at corporate welfare.  It’s just as insidious as individual welfare, it’s extremely costly, it’s undoubtedly unconstitutional, and it provides perverse behavioral incentives.  While I have no love for welfare queens or for the pathologies that federal and state welfare programs generally encourage, it seems hypocritical to me to complain about one group of welfare recipients but not the other.  Big business is not special or irreplaceable, and if mega-corporations need government to survive then perhaps it would be better to let them die.  At any rate, principle demands that opposition to one form welfare be accompanied by opposition to all other forms of welfare.  Hopefully Republicans pick up on this point and work to end corporate welfare.

Unemployment May Be Worse Than We Think


One million Mexicans said they returned from the US between 2005 and 2010, according to a new demographic study of Mexican census data. That's three times the number who said they'd returned in the previous five-year period.
And they aren't just home for a visit: One prominent sociologist in the US has counted "net zero" migration for the first time since the 1960s.
Experts say the implications for both nations are enormous – from the draining of a labor pool in the US to the need for a radical shift in policies in Mexico, which has long depended on the billions of dollars in migrant remittances as a social welfare cornerstone.

In a sense, massive immigration can be a good problem to have, since it indicates, if nothing else, that people want to be in your country.  Thus, the net zero rate of immigration is troubling, as a contra-indicator, because it shows that foreigners are less-inclined to believe that the US is a place of opportunity.  This further suggests* that the unemployment situation may be worse than we think.

If potential migrants don’t think that they can find a way to make money here, whether entrepreneurially or by having a job, then it stands to reason that they think their economic opportunities are not particularly good.  In essence, the economy is terrible, particularly as it regards employment.  I realize that this is not exactly news, but I think it’s important to point out that reduced immigration kind of undermines the rosy employment picture the federal government has been trying to paint for some time.

* Though does not necessarily prove.

Women Are More Moral Than Men

That’s what science says:


The study, which measured responses to questions about honesty and competency, showed females are more likely to make decisions based on how they impact on others.

The more correct way to phrase the results of the study is that women are more susceptible to peer pressure, which ain’t exactly the stuff great religions are made of.

My Proposed Buffet Rule

Some high income Americans pay a lot of tax; others do not.  If you have right tax advice and if most of your income can be structured as some form of “capital gains”, your marginal rate – what you pay on the your last dollar of income – may be very low.  The highest marginal income tax rate currently is 35 percent, while long-term (over a year) capital gains are taxed at 15 percent at most.
The Buffett Rule is a proposal is establish a minimum tax rate for “millionaires” – people earning more than $1 million per year – and the Senate is likely to vote on a version this week.  The exact amount of revenue that this would bring in depends on the details, but there is no question that it is small relative to the country’s need to control the federal budget.  (The Joint Committee on Taxation scored one version of this proposal as generating about $30 billion over ten years; the annual budget deficit will remain over $1 trillion in the near term even under the most optimistic projections.)
In the first place, let me just note that Warren Buffet is a sniveling hypocrite of the highest order if his effective tax rate is higher than that of his secretary’s.  See, Buffet holds the solution to the problem right in his own hands, in that his nominal income tax rate is presumably higher than his secretary’s, and so all he needs to do to increase his effective tax rate is…stop making deductions.  In fact, if he’s so concerned with increasing his tax rate, why doesn’t he forego all deductions and credits, and report all the money he makes as income (instead of reporting some of it as, say, capital gains)?  What disingenuous pricks Buffet and his ilk are.

But more to the point, I think I can see a solution that would work out well for everyone.  Why not allow a voluntary guilt tax for uber-wealthy liberals?

Under my plan, uber-wealthy liberals who didn’t think that the wealthy were being taxed enough could opt to have all deductions and credits eliminated on their personal tax return, and could even add points to their tax rate! This would ensure that those calling for increased taxes would get exactly what they want, and have the additional bonus of making sure that those who want lower taxes will not be forced to endure tax raises.  Everyone wins!

One More Thing


Among the more frightening numbers in the most recent U.N. population projections is the prospect of Nigeria -- already sub-Saharan Africa's most populous country of 150 million -- ballooning to an incredible 756 million people. Most everyone agrees that this would be, in a word, bad. Already, the majority of the country's citizens live on just a few dollars a day; public services are stretched to capacity and often non-existent outside the cities. There is little chance that any country anywhere could keep up with a growth of five-fold over just a century, let alone this one.
What's to be done? Jeff Sachs, Columbia University economist and an advisor to U.N. Secretary General Ban Ki-Moon offered one controversial suggestion in an interview with the AFP while in Nigeria this week: working toward a goal of a three-child limit. Alex Thurston at Sahel Blog asks if this is a good, or even feasible idea. Well here's my take: Imposing some sort of three child limit wouldn't work, would create enormous perverse incentives, and would probably discriminate against impoverished and rural families.

Her two reasons are very much worth reading, but I would like to add one more.  Given the spread of abortion technology, as well as the increased technological advances regarding pregnancy health, particularly as it regards one’s ability to determine the sex of the fetus, I would bet that there would be a slight increase in the male ratio of the population, over the long term.  While this effect would not be as pronounced in Nigeria as it was during, say, China’s one child rule, it would likely pop up to some extent, and usher in the attendant violence and general misbehavior that a predominantly male population brings.

Another Reason Why I Don’t Vote


There are a couple reasons I don’t vote:  I don’t consent to being governed—particularly by jackasses—and I don’t want to be responsible for what those who nominally represent me do.  Furthermore, my vote is increasingly worthless due to fraud.  Really, it’s amazing that to me that people still put their faith in the democratic system in light of the voter fraud, in light of how politicians ignore the constitution, and in light of how few differences there actually are between the competing candidates in any given election.

17 April 2012

Book Review

Not with a Bang But a Whimper by Theodore Dalrymple

As in his other books, Dalrymple retains his droll, and slightly acerbic style, artfully piercing through all the dogma and nonsense that surrounds modern wisdom.  In this collection of essays, Dalrymple waxes eloquent about a seemingly disparate collection of topics, ranging from murder to literature to insane asylums.  At first blush, it does not seem as though there is an overarching theme to his book, but a thoughtful analysis of his writing would lead one to believe that Dalrymple is focused on how life is brutish, nasty, and short, and how these conditions are becoming more common as the ill-named progressives implement their deranged and contra-reality vision on the societies which they inhabit and, in a sense, rule.

Though Dalrymple appears at times to be detached from that which he writes about, he tends to approach his subjects with a sense of empathy, tenderness, and even occasionally passion.  He seems especially passionate about language, and brutally scorns those who claim that English is a living malleable language, used subjectively by its speakers.  He especially derides those who decry teaching the fundamentals of grammar on the grounds that doing so would be elitist.  The reason for his rage is somewhat personal, predicated on first-hand experience of watching those who wish to communicate deeper abstractions give up in frustration because they lack the vocabulary to do so.  In ceasing to require that people learn English and appreciate its masters (Shakespeare, Chaucer, and many others), the elites have effectively prevented people from making the most of life.  In a word, the elites have handicapped those whom they portend to help.

Dalrymple also waxes at length about education, particularly in how it has been dumbed-down, much to the dismay of teachers and the ruin of students.  Self-esteem is the highest measure of worth now, yet it is artificially contrived, built on happy talk instead of accomplishment.  Those who grew to age in such an environment are at a significant disadvantage because they cannot stand to be told that they have little to be proud of even though they must ultimately suspect that this is true.

Discussions of justice, law, and crime fill a good portion of the pages.  Dalrymple points out how crime has increased in England, and how Orwellian the government has become in covering up this fact.  Naturally, this does not bode well for the future.

Dalrymple also takes some time taking Tony Blair to task in a wonderful essay entitled “Delusions of Honesty.”  Conservative Americans that believe Blair was a good conservative PM would do well to read this essay and learn how corrupt, dishonest, and liberal Blair truly was.

The book closes with a heart-rending essay called “The Murderesses Tale.”  In it, Dalrymple tells the story of a girl born to a carousel-riding single mother.  The mother chased the abusive bad boys, gave birth to six children that she promptly neglected, and spent most of her time avoiding work and responsibility.  Her daughter, the one whom the story centers around, ended up being sexually molested by her older half-brother.  When she brought this to her mother’s attention, her mother kicked her out of the house.  When her mother came back to fetch her, she made her apologize to her brother for “telling tales.”  Eventually the girl managed to escape from her family by essentially enrolling herself in family services, wherein she met her lover—a thirteen-year-old girl.  The girl was eventually emancipated by the government at sixteen, and given her own apartment and stipend—at taxpayer expense, of course.  Her young lesbian lover was eventually able to escape and move in with her.  They spent most of their days drinking and smoking pot.  And then one day the two girls had a fight, and the older girl killed the younger girl.

Dalrymple was called in to analyze the young murderess, to see if she was in her right mind, and able to stand trial.  What he found disturbed him:  the young murderess was in her right mind.  He noted that she took responsibility for actions by admitting to them and expressing her profound regret for what happened.  Unlike many criminals, she did not blame anyone but herself for her predicament.  More strangely, she was finally making something of her life in prison:  she was taking classes to improve her English and mathematical abilities.  She was finally able to feel secure, for she finally had limits to her behavior.  Disturbingly, she was not able to be truly free until she was in prison.

Overall, the book is compelling, though rather depressing read.  One cannot help but to get the sense that a storm is brewing in the West, given the anecdotal evidence of serious social decline.  Though Dalrymple’s prose is delightful, it at times seems ill-suited for the dreary task at hand, which is declining the fall of the West.  It’s a must-read.

The Autism of Economics

In a prior post, I offered an alternative explanation for socialism’s failure.  In doing so, I critiqued economists that defend the free market on the grounds of monetary incentive structure of being too narrow in their thinking.  While monetary incentives play a role in human behavior, they are not the only motivator, and are often not the primary motivator.

Unfortunately, many economists ignore this simple truth in their analyses of various market-related issues.  I suspect the main reason for this has to do with the very simple fact that many economists have a sort of penis envy towards physicists, by which I mean that economists seem to love complex mathematical models.  Price points are extremely useful to these models, as they lend the models an air of objectivity and, in some cases, finality.  While some of the more sophisticated economists know that they can assign value functions to non-monetary indices, the assignments of value often feel arbitrary, thus undermining the air of objectivity that economists are so desirous of, perhaps in their quest to gain some sort of influential power over policy-makers, which is thus ultimately a form of status-seeking.

This mechanistic approach to economic analysis is quite autistic in that it generally fails to account for value that humans place on things that cannot be quantified monetarily, like emotions.  Indeed, the economics profession is filled with sundry examples of autistic jackassery that is fundamentally predicated on economists being, for whatever reason, completely unable to understand what motivates human behavior.  To their surprise, humans are motivated by things other than money.  The economists call these motivations irrational.

The most egregiously autistic economists are those that defend free trade and free labor, which usually requires the denial of the social constructs broadly known as culture and society.  This in turn undermines the concept of the sovereignty of nations and states.  Whether this is a good thing is debate best reserved for another post.  For now, the relevant consideration is that not everyone thinks that free trade and free labor are good ideas because some people drive some value from what they perceive to be patriotism.  To put it another way, there are a decent number of people who find the feelings they get from identifying with a collective entity (say, the US) or supporting a concept (say, Americanism) to be worth the cost of excluding foreigners.  Because this imposes some quantifiable monetary costs without providing quantifiable benefits, those who oppose free trade and free labor are derided as ignorant, xenophobic, and/or simply stupid.

This autism extends to even the presumably least autistic branch of economics:  behavioral economics.  Here, people are defined and accepted as being irrational.  As such, it is the policy makers who need to get on board with man’s irrationality and adjust accordingly.

But even this view, where human idiosyncrasies are tolerated and occasionally celebrated, is essentially predicated on the notion that value is only measured monetarily.  For example, leading behavioral economist Dan Ariely tried to prove irrationality in his book Predictably Irrational.  The irrefutable experiment undertaken by Ariely consisted of offering people chocolate for purchase.  There were two options:  one with a simple, sticky price (two pieces for five cents, if memory serves me correctly) and one with a more complex price (a differently-weighted piece for three or four cents, assuming my memory serves me correctly).  The utility maximizing option was the latter one, yet the vast majority of people chose the former.  From this Ariely concludes that people are irrational.  He does not ever think to consider whether such a trivial decision merits any significant consideration as regards to utility maximization.  Stated another way, when the stakes are so low, there is little point in weighing your options.

Like the mainstream economists, Ariely and other behavioral economists fail to account for non-monetary value, which in the aforementioned case would be the value of time.  Is it really rational to use much mental energy for such a negligible decision?  If not, how can it be considered irrational to not use one’s time to maximize a miniscule amount of utility?

Beyond this, economists seem to be unable to recognize the motivating forces behind common interactions, like gift-giving.  Economists soullessly deride people for giving non-cash gifts, declaring such interactions to be “inefficient.”  The theory is that if people valued the gifts they received at par with or in excess of market price, they would have bought the gifts themselves.  That the recipients of a certain gift did not buy the gift for themselves is proof positive that they did not value the gifts at price, and therefore the giver is wasting money because the value the recipient places on the gift is not equal to or greater than the price of the gift.

This analysis fails because it fails to account for the value of the gift exchange itself.  Both the giver and the recipient place value on the interaction itself, and simply that which is being exchanged.  The giver enjoys an emotional response to pleasure exhibited by the recipient and vice versa.  Furthermore, the broader signal that the giver cares for the recipient presumably has long-term non-monetary value.  Unfortunately, economists’ autism prevents them from seeing the emotional and social value of a gift exchange, thus leading them to deride a longstanding tradition.

This autism is occasionally, and quite perversely, worn as a badge of honor.  Some economists often seem to view themselves as somewhat superior for having overcome some of their petty irrationalities.  But doing this can be dehumanizing, since it is our so-called irrationality that makes each of us unique, and provides some meaning in our lives.  Who cares if we’re more likely to buy chips when their cost is 2 for $5 than when they’re $2.50 a bag? This heuristic may not be totally rational from a pricing standpoint, but it is an efficient way of dealing with a trivial decision, which means less time is wasted thinking about trivial things and is instead spent enjoying life.  Should people be begrudged for that?

Now, none of this is to suggest that the study of economics is worthless and unworthy of support.  On the contrary, economics is an important subject, and most analysis is useful and worthy of study.  However, economics does have some blind spots, mostly due to its current autism.  Understanding economics’ autism is helpful, then, because it enables one to see the limits of economic analysis and adjust one’s interpretation accordingly.  Thus, economics need not be scrapped; rather, people should be aware of its limits imposed by the autistic tendencies of its practitioners.

16 April 2012

GreyMail: Political Corruption

MB shares this story:

A five-day Western Regions Conference at Las Vegas in October 2010 for 300 people cost more than $822,751, according to a report from the General Services Administration’s inspector general.
Along with excessive spending violations, the report claims that a $58,808 contract was given to large audio and visual services company, Royal Productions, when federal law requires them to be awarded to small businesses, according to the Washington Post.

Though I’m philosophically opposed to government regulation and its attendant bureaucracy, this story provides a perfect example of why one should be opposed to regulation and bureaucracy on pragmatic grounds.  Namely, bureaucrats are too busy wasting taxpayer money to enforce the regulations.  Thus, the problem with regulations is not necessarily that they are bad in theory (though some undoubtedly are), but that they are pointless because the people tasked with enforcing them are too busy partying in Vegas and, as was the case with the SEC some months ago, to busy jerking off to porn.

Why Collectivism Fails

In the first place, it is helpful to define collectivism and failure.  Collectivism refers to any and all economic and political systems where goods and services are publicly owned and operated; it is also popularly known as communism and socialism, among other terms.  Failure is defined as failing to satiate the maximum number of persons’ desires as feasible, or, more generally, failing to supply persons with their basic needs (healthy food, clothing in good repair, shelter from the elements).

There are many theories as to why collectivism fails, most of them having to do with incentive structures. This view is not necessarily wrong, but it is very limited, and does not account for the range of human emotions and motivations.  Monetary incentives do impact human behavior; this is not in dispute.  However, it is foolish to assert that human behavior is always and ever motivated by monetary incentives—as some economists seem wont to do—or that it is always a primary motivation.  As such, it is helpful to look at the failure of collectivism more broadly.

One thing that is interesting about those who are more inclined toward the collectivist persuasion (henceforth called leftists) is that they are generally observed to be hypocrites, in the sense that they often demand collective action for something—say, welfare to help the poor—but do not themselves make any individual effort towards that end.  More commonly, those of the leftist persuasion believe that their personal contribution to relieving the plight of the less-fortunate—however defined—is “raising awareness.”  Thus, leftists often talk about helping the poor, in the name of raising awareness, but never themselves get around to actually helping the poor.

Ultimately, this is nothing more than status-mongering.  Instead of actually doing something, the collectivists live in a world of ideals, wherein it is better (read: higher-status) to signal one’s affiliation to an ideal than to actually live by it.  It is therefore better to preach selfless sacrifice in the name of helping others than to teach profit motive.  While profit motive, as Adam Smith observed, can be a significant motivator, it is, in the eyes of leftists, a morally inferior motivator.  Thus, one must call for selfless concern, and raise awareness for said type of concern.  But one need not concern oneself with getting one’s hands dirty.

Thus, one potential explanation for the failures of collectivism is that a collectivist society places more emphasis on signaling group affiliation than actually getting things done.  This stands in contrast to an individualist-oriented society, which by definition avoids group affiliation.  The individualist society, then, has only personal accomplishment as a status signal, which strongly encourages productivity because the only way one has status is to create it for oneself.  Collectivists, though, always try to appropriate others’ status for themselves.  In essence, the collective identity enables some individual to credit for something even though said individuals have not actually done anything that can be meaningfully described as productive.

The collective political economy, then, is one based on higher-order status signaling, and not more direct (and productive) lower-order status signaling.  As such, it is more likely to fail because most participants are too busy chasing status to make things.  Basically, it’s better to signal status and identity than do actually do something.

15 April 2012

The Cult of Youth

The problem with youth is that it is often possessed by idiots.  For some reason, young people have a tendency to do stupid things.  Youth are more violent, for one, and are generally less mature, in several senses.  Since their brains are in the process of maturing, they are more likely to rush to judgments, and stupid ones at that. They lack experience, and thus knowledge.  They are blindly confident also, save for the occasional freak that completely doubts himself.  This leads to creating the perfect storm of ignorance, arrogance, stupidity, and violence.

This, unfortunately, has always been true of youths, from time immemorial.  Not in an absolute sense, necessarily, but in a relative sense it said that the youth are stronger, more arrogant, stupider, and more violent than the aged.  This should make sense, for each of these things are a young man’s games.

What’s puzzling, though, is the celebration of youth.

Arrogance, though attractive to foolish young girls, is a vice, not a virtue.  Violence, and its attendant risk, is a vice not a virtue.  Ignorance is a vice, not a virtue.  And so on.  Those distinct characteristics of youth are troublesome, to say the least, but are often overlooked.

The young are not ignorant, they are idealistic.  The young are not naïve, they are pure—or, better yet, filled with virtue.  The youth are not violent, they are expressing themselves.  The youth are not arrogant, they are confident.  And so, the youth are continually told that they are the future, that they are the embodiment of noble ideals, the personification of virtue.  Or so say the celebrants of the cult of youth.

But this is utter bullshit.

Wisdom, idealism, self-expression, confidence, and so on are all timeless concepts, not tied to any age.  They can be observed and idealized separate from the constructs of time, and their occurrence need not be lauded alongside the presence of other faults and vices.  Consequently, it is not necessary to excuse bad behavior in the pursuit of an ideal since an ideal can exist separate from a concrete manifestation.

What’s sickening, though, is how the cult of youth ignores the simple fact that one need not worship youth, or excuse its excesses and vices in order to laud its occasional virtues.  More to the point, there is no reason to idolize youth given how terrible it is in reality.  One can, as noted, divorce the abstract from the concrete.  In fact, this is how ideals are born.

But instead of holding to ideals, it is now fashionable to celebrate the decidedly imperfect concrete as a way of inspiring(?) others to act virtuously. This is, of course, broadly seen in American society, wherein the young are given every excuse for bad behavior imaginable.  The legal system coddles the young and far too often parents do likewise.  Dalrymple observes that parents have become deferential to the young, and that the rest of society follows suit, because everyone is afraid of what the young can do.  Therefore, because no one exercised control over the youth when they were still toddling about, no one can exercise control over the youth once they reach physical maturity.  The youth have long known, from their parents’ actions, that they were in charge.  And then, when they come of age, they act like it.

This mindset has permeated the school system, wherein those who subscribe to the tabula rasa school of child development assume that all children will easily learn the concepts taught in school of only the teachers weren’t so incompetent at their jobs.  This is an inherently youth-centric approach, as it is assumes the youths are perfection incarnate, and that but for the foolishness and imperfections of adults children would realize their perfection.
Worse still, this tendency has crept into the church.  The young are often celebrated for their wisdom—which comes from their purity, having not yet been corrupted by the cynicism of adulthood—and for their energy.  The youth are the central focus of the church.*  “How can we attract young people?” is the common lament among pseudo-Christians.  There is no such pontificating about being more like God, only about attracting the young.

But this tendency is not wholly illogical.  Older people have no energy to work, and, these days, they often have no wisdom, preferring the theory of gender equality to its historical reality, and the doctrine of niceness to the doctrine of Godliness.  The current generation of the hoary-headed has done a terrible job; why not give the youth some time in the drivers’ seat?  Could they do that much worse?

Perhaps not.  But lauding youth as the ideal of wisdom is both foolish and pointless.  It’s foolish in that the youth are generally unwise, and thus unqualified to be the ideal of wisdom.  It’s pointless in that wisdom is already an ideal to itself, and therefore needs no other abstraction, particularly one that is as ill-fitting as youth.

This is not to say that youth is terrible; on the contrary it is a wonderful time in one’s life.  The naiveté and arrogance of youth is what enables the young to take risks that adults would never dare dream of taking.  Yes, sometimes the risks undertaken are foolish.  Sometimes they are not.  It is the idiot savants that come out alive.  But being an idiot savant presupposes being an idiot.

The reality of the matter is that it is in youth when one first experiences base desires.  Maturity, then, is the process of bringing those base desires into control, and moderating them into healthy appetites.  Elders, and their attendant wisdom, are what youth need to help guide them along this process.  And herein lies the failure of the Baby Boomers:  having never once learned to control their base desires, they are now in no position to tell other generations to do the same.

And now today’s youth are in the unenviable position of being society’s moral ideal while also being wholly unqualified for the job.  Unfortunately, all the other generations are wholly unqualified for moral leadership as well, and so the youth take over by default, simply because they are the unqualified.

The cult of youth is a toxic thing, both for its practical effects—in this case the blind leading the deaf and blind—and for its implications—there is currently no generation fit to be the moral leaders of society.  The former speaks of a future of waste and destruction; the latter speaks of squandered opportunities.   In the end, the cult of youth will be our downfall.

*  As evidenced by youth groups.  You would think that the church would focus on Christ, though, seeing as how the church is the bride of Christ.

12 April 2012

When Metaphors Fail

Consider this nonsense:

What if borrowing money made you so much richer over the long-term that it paid for itself? It's not crazy. Millions of families make such a decision every year when they take on debt to pay for school. Indeed, investing in yourself is a bet that often pays off. But can the same be true for an entire country?
Brad DeLong and Larry Summers say yes. In a provocative new paper, they argue that when the economy is depressed like today, government spending can be a free lunch. It can pay for itself.

Except here’s the thing:  families don’t borrow from themselves; they borrow from other holders of capital.  The government, on the other hand, basically borrows from itself.  Now, economists like to get technical and explain that the Fed is not the same as the treasury.  It’s also true that the department of the interior is not the same as the department of defense, but no one would suggest that the former loaning to the latter would constitute anything other than the government loaning money to itself.

Now, to answer the question at hand:  yes, investing in the country over the long term should pay off.  But let’s not kid ourselves.  When the government borrows from itself, and particularly when the method for doing so is having the central bank purchase bonds from another department, all that happens is inflation.  Inflation and investment are two different things.  The latter, for example, is productive while the other is destructive.  And it takes a significant amount of ignorance, deceit, or stupidity to call inflation a form of investment.

10 April 2012

Coming Home to Roost


Master Lock, which has made locks in Milwaukee since 1921, has brought 100 jobs back from China over the last year and a half. And Mr. Bink, who has worked at the plant for 33 years and heads the United Auto Workers local, is sure more will follow. “They are making a lot of capital investment; buying a lot of new equipment,” he said. “That will create more jobs.”
Master Lock’s story dovetails nicely with the budding upturn in manufacturing employment, which has rekindled hope across a Rust Belt pummeled by 30 years of job loss. Nationwide, factories have added 400,000 jobs in the last two years, the first sustained bout of growth since the 1990s, replacing about a fifth of the positions lost during the recession. Other companies, from Otis to General Electric, are bringing home jobs once thought lost for good.

While more domestic jobs are a welcome development, it is sad that they are only now returning because the transfer of wealth is reaching completion.  The price of American labor has now begun to decline to the point where domestic production is feasible.  This also means that foreign labor’s price has increased to the point where foreign production is no longer feasible.  What happened?

In brief, the federal government decided it would be a good idea to hamstring domestic businesses in a variety of ways, including price floors for labor, costly regulations, high corporate taxes, and a large number of other impediments.  While doing this, the federal government decided that it was simultaneously a good idea to open up the market to foreign producers, especially those who did not have the same regulatory burdens as domestic businesses.

This caused upheaval in labor markets.  It also caused some capital flight.  Some Americans lost their jobs, but at least they had cheap goods, most of which the federal government prohibited them from manufacturing.  Now, foreign workers have the capital (including intellectual capital) that would have otherwise belonged to US citizens had not the government taken it from them.  Now, US citizens have jobs again, only they don’t have all the capital that generally goes with these jobs because the government effectively taxed it away from them and gave it to non-citizens.  The kicker of this story is the federal government is nominally a representative democracy, and acts on behalf of its citizens.

09 April 2012

Book Review

Mindless Eating by Brian Wansink

The main thesis of the book is that humans have a tendency to gain weight because they eat mindlessly.  They don’t pay too much attention to what they eat, or how much they eat, or the healthiness of what they eat.

Wansink first makes the case that people often rely on many cues to tell them when they’ve had enough.  Common cues include empty containers and serving dishes.  Once the food runs out, we tell ourselves we’re full.  In many ways, it’s amazing how easily we fool ourselves when it comes to food.  Instead of paying attention to the cues our stomach sends our brains, we often rely on our environments to tell us when we’ve had enough.

Also, humans are terrible at tracking caloric intake.  We often underestimate how much we eat.  One main reason for this is simply due to how easy it is to forget food that we acquire conveniently.  Wansink also points out that we can set in place a variety of terrible eating habits, like using unhealthy foods (think ice cream) as positive reinforcements for special occasions (like getting an A on a report card), which biases our eating habits later in life.

Fortunately, Wansink proposes simple dietary solutions to the problems that he identifies and explains throughout the book.  Most of his solutions don’t require impossibly demanding deprivation, but rather restructuring the habits that we form around food so that one starts to thoughtlessly eat less instead of thoughtlessly eating more.

The book is short, fast-paced, and somewhat action- oriented.  It does drag at a couple of points, but it picks up the pace quickly, and moves on to fascinating things.  The book is centered more on behavioral psychology and neurology than on nutrition, which sets it apart from many other diet books.  Better yet, the advice does not require radical lifestyle changes as much as it requires a couple of tweaks.
There’s more to the book besides this, obviously, and it is very much worth a read.

08 April 2012

Let’s Be Honest

For whatever reason, it is unfashionable to be realistic about reality.  Even among conservatives.  John Derbyshire is being lambasted for this article.  Most people practice what Derbyshire preaches, yet everyone seems to be offended by him making simple observations about a reality which most people not only acknowledge, but practically live by.  Since Derbyshire’s accurate assessment of reality offends so many, I feel compelled to link to it and quote it:

(6) As you go through life, however, you will experience an ever larger number of encounters with black Americans. Assuming your encounters are random—for example, not restricted only to black convicted murderers or to black investment bankers—the Law of Large Numbers will inevitably kick in. You will observe that the means—the averages—of many traits are very different for black and white Americans, as has been confirmed bymethodical inquiries in the human sciences.
(7) Of most importance to your personal safety are the very different means for antisocial behavior, which you will see reflected in, for instance, school disciplinary measurespolitical corruption, and criminal convictions.
(8) These differences are magnified by the hostility many blacks feel toward whites. Thus, while black-on-black behavior is more antisocial in the average than is white-on-white behavior, average black-on-white behavior isa degree more antisocial yet.
(9) A small cohort of blacks—in my experience, around five percent—isferociously hostile to whites and will go to great lengths to inconvenience or harm us. A much larger cohort of blacks—around half—will go along passively if the five percent take leadership in some event. They will do this out of racial solidarity, the natural willingness of most human beings to be led, and a vague feeling that whites have it coming.
(10) Thus, while always attentive to the particular qualities of individuals, on the many occasions where you have nothing to guide you but knowledge of those mean differences, use statistical common sense:
(10a) Avoid concentrations of blacks not all known to you personally.
(10b) Stay out of heavily black neighborhoods.
(10c) If planning a trip to a beach or amusement park at some date, find out whether it is likely to be swamped with blacks on that date (neglect of that one got me the closest I have ever gotten to death by gunshot).
(10d) Do not attend events likely to draw a lot of blacks.
(10e) If you are at some public event at which the number of blacks suddenly swells, leave as quickly as possible.
(10f) Do not settle in a district or municipality run by black politicians.
(10g) Before voting for a black politician, scrutinize his/her charactermuch more carefully than you would a white.
(10h) Do not act the Good Samaritan to blacks in apparent distress, e.g., on the highway.
(10i) If accosted by a strange black in the street, smile and say something polite but keep moving.

“He Must Rise Again From The Dead”

Now on the first day of the week Mary Magdalene went to the tomb early, while it was still dark, and saw that the stone had been taken away from the tomb. Then she ran and came to Simon Peter, and to the other disciple, whom Jesus loved, and said to them, “They have taken away the Lord out of the tomb, and we do not know where they have laid Him.”
 Peter therefore went out, and the other disciple, and were going to the tomb.  So they both ran together, and the other disciple outran Peter and came to the tomb first.  And he, stooping down and looking in, saw the linen cloths lying there; yet he did not go in.  Then Simon Peter came, following him, and went into the tomb; and he saw the linen cloths lying there,  and the handkerchief that had been around His head, not lying with the linen cloths, but folded together in a place by itself.  Then the other disciple, who came to the tomb first, went in also; and he saw and believed.  For as yet they did not know the Scripture, that He must rise again from the dead.  Then the disciples went away again to their own homes.
But Mary stood outside by the tomb weeping, and as she wept she stooped down and looked into the tomb. And she saw two angels in white sitting, one at the head and the other at the feet, where the body of Jesus had lain.  Then they said to her, “Woman, why are you weeping?”
She said to them, “Because they have taken away my Lord, and I do not know where they have laid Him.”
Now when she had said this, she turned around and saw Jesus standing there, and did not know that it was Jesus.  Jesus said to her, “Woman, why are you weeping? Whom are you seeking?”
She, supposing Him to be the gardener, said to Him, “Sir, if You have carried Him away, tell me where You have laid Him, and I will take Him away.”
Jesus said to her, “Mary!”
She turned and said to Him, “Rabboni!” (which is to say, Teacher).
Jesus said to her, “Do not cling to Me, for I have not yet ascended to My Father; but go to My brethren and say to them, ‘I am ascending to My Father and your Father, and to My God and your God.’”
 Mary Magdalene came and told the disciples that she had seen the Lord, and that He had spoken these things to her.
—John 20:1-18

On this day may all Christians the world over be especially mindful of Christ’s resurrection and the hope that it brings.

07 April 2012

The Future Is Not Pretty For Women


Sixty percent of women in the United States who are 65 or older do not have enough income to cover basic expenses without help, even if they are married, according to the report.
That is compared to 41 percent of men in that age group.
The report compares income, not including food stamps or help with utility bills, to very basic monthly expenses for housing, food, transportation and health care. For a single person, this Elder Economic Security Standard Index, developed by Wider Opportunities for Women, estimates an annual income of $19,000 to $28,000, depending on whether they own their homes outright, rent or pay a mortgage. For married couples, the necessary income to cover basic expenses ranges from $29,500 to $39,000.
More than half the nation’s elderly do not make enough. But women, who typically outlive men, are more vulnerable. Nearly half of white women, 61 percent of Asian women and three-quarters of black and Hispanic women have incomes that fall below the Elder Index levels. Men 65 or older report incomes that are almost 75 percent higher than women’s.

There are two trends that promise a miserable future for women.

First, the sexual revolution, which has enabled female promiscuity on a scale heretofore unseen, has done serious damage to marriage, and will continue to do so as men realize that informal LTRs are preferable to legal marriages.  This means that women are less likely to have husbands in the future, ad will be less assured of having access to a man’s wealth.  This will be problematic for women since it is already difficult for them to make ends meet without spousal or government help.

Second, the current federal spending trend is unsustainable.  Quite simply all the benefits that today’s retirees take for granted, plus all the other benefits that politicians continue to promise them in their various bids for election, will simply not exist in the future.  People cannot have everything, which is one way of saying that resources are finite.  At the current rate of consumption, they will eventually be squandered, and no one will have anything.  This means that women will be even worse off because the government will not be able to provide for them anymore, particularly if environmentalists of the left wing manage to impose their plans for destroying the economy for Gaia.

Women will have three options to avoid this mess.  They can either take their future financial security into their own hands by getting degrees and jobs (and real jobs, wherein one actually contributes to the economy and doesn’t merely engage in busy work), they can marry beta providers (trololol), or they can become part of an alpha harem (and here alpha refers to a man who can command resources to provide for multiple women). My guess is that women will go down first path until the bottom falls out of the economy and demand for superfluous workers declines, and then they will go down the third path, which will incidentally lead to the decline of civilization.

Tax Myths

A somewhat strange myth has taken hold in some precincts of American conservative opinion that some vast swathe of the population isn't paying taxes. In fact everyone pays sales taxes and other state and local taxes, and as Adam Looney and Michael Greenstone write for the Hamilton Project almost all working-age people pay federal tax on their income.
The main bloc of people who don't pay income or payroll taxes are elderly people. Old people tend not to work, and many old people don't have much in the way of investment income either. But it's not like they're freeloading, they're just people who paid taxes in the past when they were working.
There are a couple of points worth making.

First, Yglesias is correct in noting that technically everyone pays taxes.  Some taxes are direct, like fees for federal services, sales taxes, payroll taxes (which are generally only avoided by student workers, a handful of other workers, and the unemployed), and a few other taxes besides.  Furthermore, everyone pays taxes indirectly, in the form of foregone goods and services.  Corporate taxes are a perfect example of this, and some limited taxes (think: capital gains) also have indirect costs.  Thus, to say that no one pays taxes is technically incorrect and highly misleading.  If conservatives continue to say that there are a large number of people who don’t pay any taxes, they will find themselves facing political problems later.

Second, the more technically correct claim would be that there are large numbers of people who don’t have any income tax liability.  This could mean that some people don’t earn enough to be charged taxes, it could mean that some people are able to claim enough deductions to avoid having to pay taxes, or it may be that someone is able to claim enough tax credits to negate their tax burden.  Not having an income tax liability does not necessarily make one a parasite on the system, and given that a large number of current non-tax-payers have basically paid taxes for fifty or more years, painting them as lazy or as parasites, or as evidence that the system is on the verge of collapse is likely not going to go over very well politically.

Finally, the correct response to this issue should be two-fold.  Conservatives should use this issue to argue for generally lower tax rates for all, in the name of fairness.  Instead of raising taxes on current non-payers, conservatives should argue for lowering rates on current payers.  In keeping with this, conservatives should also call for radical spending cuts.  Ideally, conservatives would cut out all unconstitutional spending, which would cut the current budget by roughly 60%.  In lieu of this, a spending cut of at least 45% would be acceptable.

At this point in time, conservatives have a good opportunity to cut taxes and reduce government spending.  As long as they understand the reality of non-payers and take pains to not put their collective feet in their collective mouths, and as long as they hammer home spending cuts (hopefully in a more serious manner than Paul Ryan), they should have a chance at actually making a difference.

04 April 2012

Liberalism’s Incoherence


The guarantee of landline telephone service at almost any address, a legal right many Americans may not even know they have, is quietly being legislated away in our U.S. state capitals.
AT&T and Verizon, the dominant telephone companies, want to end their 99-year-old universal service obligation known as “provider of last resort.” They say universal landline service is a costly and unfair anachronism that is no longer justified because of a competitive market for voice services.
The new rules AT&T and Verizon drafted would enhance profits by letting them serve only the customers they want. Their focus, and that of smaller phone companies that have the same universal service obligation, is on well-populated areas where people can afford profitable packages that combine telephone, Internet and cable television.

Disclaimer: I don’t know if Johnston is a liberal.  I do know that this opening sentence personifies quite nicely liberals’ view of rights.

The liberal dichotomy—and corresponding hypocrisy—is typified by how they desire for everyone to have everything while simultaneously condemning everyone for materialism (talk about projection!).  In this case, liberals would agree with Johnston’s assertion that basic telephone service is a right.  This positive view of rights implies that someone will have to provide them with the service, even if it isn’t profitable.

This view of rights extends to everything—education, health care, internet service, wages, employee benefits, etc.  Everyone should have everything they want.

Unfortunately, not everyone wants the same things, and so what people do with their newly-acquired positive rights is try to get whatever they can for themselves.  This behavior is individualistically rational, and entirely predictable.  It also tends to promote materialism, which is often condemned by liberals.

The modern condemnation of materialism is seen in the environmental movement.  Consumption is condemned, as evidenced in the condemnation of burning fossil fuels, which is an essential source of energy, particularly in regards to the propulsion of automobiles.  The solution to our current environmental problems is to burn less fuel in particular by driving less.

Interestingly, one reason why we drive so much is because it is cheaper to live in areas that are not as population-dense, thanks in no small part to federal subsidies.  One contributing federal subsidy is that of mandated telephone service (seriously, how many people would live in the country if there were no communication infrastructure?).  There are other subsidies besides this, like FDR’s programs to bring electricity to rural areas, or other programs to bring urban levels of infrastructure to rural areas.

And so, this is liberalism’s incoherence in a nutshell.  First they demand all sorts of subsidies for everyone (like with phone service), then they get upset at people being wasteful.  Solving the first “problem” begets the latter problem and also its solution. Ironically, they’d have what they wanted if they simply left everything alone.  Of course, I’m assuming that they want a specific outcome, and not merely the power to control other people’s lives.

GreyMail: The Laffer Curve


This is what annoys me about the Laffer curve: it's perfectly mathematically and logically sound, but once that's granted, everyone assumes the precise optimum is wherever agrees with their ideology. The extreme value theorem says nothing about WHERE the extreme value occurs. Republicans seem to assume it must occur somewhere around 0.0000001% tax rate (I exaggerate, but only a little). It's just as reasonable (read: not reasonable at all) to conclude, from the fundamental Laffer assumptions, that the nominal rate should be INCREASED, rather than decreased. And I'm pretty sure you know this, so I'm not sure why you wrote what you wrote.

There are probably a few things I should clarify regarding my beliefs in the Laffer curve.  In the first place, it seems obvious that no government will collect any taxes if the rate is 0% or 100%.  The reasons why are obvious, so I won’t elaborate further.

In the second place, the revenue-optimal tax rate (i.e. the tax rate that generates the most money for the government) will be between 0% and 100%.  I don’t think we can ever know what precise rate will generate the absolute largest amount of revenue, but we can be generally sure.

In the third place, I believe that a revenue-optimal tax plan will be simple and feature relatively low rates.  Note that I’m focusing on net revenue (i.e. revenue minus collection costs).  The most efficient tax system will impose minimal costs, and is likely to be either a flat tax or a single-stage consumption tax, with minimal or zero loopholes.  The more complex a tax system, the easier avoidance becomes, and the more costly collection becomes.

As a side note, I would like to point out that there has only ever been one year in which the federal government managed to collect more than 20% of GDP in taxes.  There has never been a single year in which the federal government collected more than 25% of GDP in taxes.  Keep in mind that this 20% wall has existed across extremely high and relatively low tax rates, and across relatively simple and complex tax systems.  For whatever reason, the government is pretty much unable to claim more than 20% of GDP in taxes, which is why I believe that a relatively low tax rate will be the most revenue-optimal.

Finally, note that my optimal tax system would be either a consumption tax set at 20% with no loopholes or a flat tax of 25%.  I would also accept either a slightly progressive income tax (three brackets, 15%, 20%, and 25% tax rates) or a flat income tax of 35% with a few deductions (mostly for oneself, one’s spouse, and one’s children).  I do not think that a revenue-optimal tax rate will be lower than 20%, nor do I think that multiple taxes are revenue-optimal.

In regards to the current system, I do actually agree that taxes should be raised, but only in one particular manner:  I believe that the lower income tax brackets should have their loopholes closed and their effective rates set to at least 15%. This should effectively increase revenue.

I do not see much point in raising income taxes on the wealthy, since they will either leave or find a way to shelter their income.  I don’t see any point in raising corporate taxes, since they are already high, and will carry the risk of offshoring companies and their correlating capital.  In fact, I don’t really see much point in raising any of the taxes that are currently popular with the increase-taxes crowd (taxes on the wealthy, on corporations, on capital gains, etc.) because I don’t think they will increase tax revenue or improve the US’s future economic prospects.  Essentially, raising taxes would be a lose-lose scenario.

In sum, most of the current tax rates would have to be lowered for revenue optimality, and the one tax raise that would increase revenues is sure to be politically unpopular.  The better solution, at this point, is to cut spending by at least 50%, and to reduce tax rates as much as possible without eliminating revenue.