The Stone City

Individuals

2009-05-13T09:54:00.004-04:00

Percentage of U.S. population who are non-Asian minorities: 28%

Percentage by which GDP is decreased due to an "education gap", as estimated by McKinsey and Company: 9-16%

Ratio of those numbers: 32-57%

That's an indicator of the cost per individual, as a fraction of everything they earn or own. Do you think the people affected somehow do not notice this, or do not care? Of course not. But the argument that parents need not be given more choices in education, because they are not skilled at rationally pursuing their children's best interests, is at heart an argument that they can't be expected to avert something as minor as a 40% decrease in lifetime earnings.

Removing All Doubts

2009-04-30T11:41:00.002-04:00

Ross Douthat, in an Atlantic column, called out Linda Hirshman on subsidies:

... if you're more of a Linda Hirshman-style feminist, on the other hand, you'll probably prefer the Scandinavian model, where after the guaranteed family leave runs its course, the socialized day care effectively incentivizes parents to get (back) to work whether they want to or not.

Ms. Hirschman responded with a post which, though meant to instruct onlookers of Mr. Douthat's boundless ignorance, turns out to be an instructive face plant. She compares the effect of subsidies with that of her own idea of tax cuts:

Case #1: The Socialist enslavement model
A family makes $100,000 in income and pays $50,000 in taxes and the government offers them public day care worth $20,000 and they take it. They have effective after tax income of $70,000. So they have a $20,000 incentive to use the government benefit and not have the mother quit her job and stay home with the children.
Case #2: Douthat "freedom" model
If a family makes $100,000 and pays $50,000 in taxes and the government offers them a tax break worth $20,000 off their taxes if the mother stays home with the children, and they take it. They have an effective after tax income of $70,000. So they have a $20,000 incentive to have her quit her job and stay home with the children.
Fancy that: tax cuts, government benefits, from the standpoint of pushing
people to do something, it's the same.

Alas, this "case #2" relies on the tax cut not being available unless the mother stays home; and this feature, so crucial to Ms. Hirshman's case, is pure projection on her part. The proposal itself contains no such feature, saying instead

The plan ... would be available to all parents no matter how much they earn, with the limit being the amount they pay in income and payroll taxes.

Ms. Hirshman was apparently in haste to illustrate her opponents' evil nature, and full of eagerness to demonstrate their inferior intelligence, so her entire post is written in the tone of one ministering to the mentally deficient:

That's because (repeat after me)
Money
Is
Fungible.

But all this rather clumsy rhetoric collapses on a simple obstacle: Ms. Hirshman apparently cannot comprehend that Mr. Douthat is not supporting government incentives but their absence -- what we would crudely call freedom.

No Banana

2009-04-28T06:39:00.004-04:00

I think most of Randy Barnett's proposed Federalism Amendments are admirable, though some would have extreme consequences which are difficult to fully fathom before the fact. But one mistake is being made repeatedly.

Article [of Amendment 7] -- [Term Limits for U.S. Senators and Representatives]
Section 1. No person who has been elected or served for a full term to the Senate two times shall be eligible for election or appointment to the Senate. No person who has been elected for a full term to the House of Representatives six times shall be eligible for election to the House of Representatives.
Section 2. ...

This is a centralized mandate on the selection of legislators; as such, it represents not federalism but its opposite. I would propose a much milder form:

Article [of Amendment 7] -- [Constitutionality of Term Limits]
No article of this Constitution shall be construed to limit the authority of each State to restrict the eligibility of persons for election or appointment to the Senate or to the House of Representatives from that state, or to its own legislature, provided that the grounds for such restriction are limited to prior election or service in those bodies.

Many others could probably word this more precisely. [I don't know whether to say "grounds" or "criteria", and there are probably larger problems as well.] This would be more flexible and far more faithful to the spirit of federalism.

All the Hot Buttons

2009-04-24T08:40:00.004-04:00

Six [6] protestors are gathered, if that's the word, outside AIG's London offices. They are holding signs protesting the existence of Huntington Life Sciences, so I guess they are affiliated with the SHAC terrorists. One has a bullhorn and is exchanging slogans with the rest:

Five hundred animals died today!
A I G! You're to blame!

At any given time, around 10 passersby have stopped to watch.

Yale's Congressional Delegation

2009-04-04T16:54:00.002-04:00

Dealbreaker transcribes Rosa DeLauro's (D-CT) explanation of the credit crisis:

One through nine, no maybes, no supposes, no fractions. You can't travel in space, you can't go out into space, you know, without, like, you know, uh, with fractions - what are you going to land on - one-quarter, three-eighths? What are you going to do when you go from here to Venus or something? That's dialectic physics.

Way to put your best foot forward, Bulldogs. Mrs. DeLauro excels herself here -- again via DealBreaker -- and has to be interrupted multiple times mid-rant.
Yes, this is the same Rosa DeLauro who rented the basement of a single-family dwelling to Rahm Emmanuel, breaking one of the minor stupid laws that she and those like her have spent their lives creating. So she fits the "useful" tag, as well.

Strong Language

2009-04-04T06:25:00.002-04:00

I am not the first to notice this passage from Light in August, but it merits reproduction.

One wall of the study is lined with books. He pauses before them, seeking, until he finds the one he wants. It is Tennyson. It is dogeared. He has had it ever since the seminary. He sits beneath the lamp and opens it. It does not take long. Soon the fine galloping language, the gutless swooning full of sapless trees and dehydrated lusts begins to swim smooth and swift and peaceful. It is better than praying without having to bother to think aloud. It is like listening in a cathedral to a eunuch chanting in a language which he does not even need to not understand.

Also interesting is Mr. Faulkner's non-denying denial when asked whether this represents his own feelings about Mr. Tennyson's work.

Before the Cascade

2009-04-02T08:50:00.004-04:00

I was thinking of an old post about "preference cascades" (linked here but the original seems to be gone):

This illustrates, in a mild way, the reason why totalitarian regimes collapse so suddenly. (Click here for a more complex analysis of this and related issues). Such regimes have little legitimacy, but they spend a lot of effort making sure that citizens don't realize the extent to which their fellow-citizens dislike the regime. If the secret police and the censors are doing their job, 99% of the populace can hate the regime and be ready to revolt against it - but no revolt will occur because no one realizes that everyone else feels the same way.
This works until something breaks the spell, and the discontented realize that their feelings are widely shared, at which point the collapse of the regime may seem very sudden to outside observers - or even to the citizens themselves. Claims after the fact that many people who seemed like loyal apparatchiks really loathed the regime are often self-serving, of course. But they're also often true: Even if one loathes the regime, few people have the force of will to stage one-man revolutions, and when preferences are sufficiently falsified, each dissident may feel that he or she is the only one, or at least part of a minority too small to make any difference.

[Emphasis mine.]
Thi is relevant to the present environment, and to the nascent "Tea Party " protests. Publicizing one's distaste for the government is not punishable by imprisonment or vanishment, as it was in the Warsaw Pact; but it is very difficult logistically. This makes preference falsification possible. The Bulk Media's role in preference falsification is to provide the appearance of a complete source of news, thus deterring truth-seeking individuals from investigating more widely.

If this model is correct, then the realization that you are not alone, that most around you feel the same way, will come suddenly and near-simultaneously to much of the country. The immediate result will be a vocal and energetic population; but this is not a guarantee of any lasting gains.

Chris Dodd, for example, is confident of being re-elected in 2010, despite the minor tempest stirred by his systematically corrupt dealings and despite polls showing he would lose a snap election now. November 2010 is a long way off, and there is no reason to expect that the voters' ire will be any match for Mr. Dodd's venality in a test of endurance.

A brief and passionate storm in, say, June of 2009 will lead to no systemic reform whatsoever. The Tea Party protests are beginning to roll the first loose pebbles of an avalanche; but what message will the participants learn and retain?

For my own part, I have little to offer here. I would like to add one slogan (inspired by the famous quote here) --

Don't you wish you'd known?

Looks Like a Nail

2009-03-31T04:11:00.002-04:00

[Reposted from Chequer-Board; dated 8 May 2008.]

Will Wilkinson, while criticizing "unreflective anti-gubmint reactions of libertarians to the FLDS imbroglio", still prefers to limit his justification to the specific evils of the FLDS, and to maintain a defense of polygamy in the abstract:

The libertarian point is that the illegality and attendant marginalization of polygamy pushes it into isolated, authoritarian, quasi-state cult compounds where these kinds of crimes are most likely to take place.

But this is one case where the libertarian point is simply wrong. Tyler Cowen hints at the reasons:

Maybe the goals of the perpetrators are rape, abuse, and power-mad intimidation, rather than polygamy per se ("polygamy: merely a means to an end.") In that case polygamy legalization won't limit their ability to set up isolated, authoritarian, quasi-state cult compounds for their nefarious purposes.

Consider the demand pattern resulting from polygamy (i.e., from polygyny). The potential demand for women immediately and irreversibly exceeds any potential supply; thus there is steady pressure to expand the supply by including marginal cases. For example, 15-year-olds.
The definition of "marginal" is not fixed by Mr. Wilkinson's norms, of course. It changes; in fact, fairly rapidly. Megan McArdle has a long discussion of this, with some striking examples.

C'mon said the activists. That's just silly. I just can't imagine anyone deciding to get pregnant out of wedlock simply because there are welfare benefits available.
Oooops.
Of course, change didn't happen overnight. But the marginal cases did have children out of wedlock, which made it more acceptable for the next marginal case to do so.

Once the 15-year olds are no longer "marginal", demand is focused downward, and downward again.
Meanwhile this intrinsically unfair system of living can only be sustained if the exit is blocked. Thus the other symptoms observed in the FLDS case -- the brainwashing, abuse and too-ready excommunication -- are not pathologies at all: they are the natural and inevitable ramification of a system in which polygamy is permitted.
When all you have is a hammer, everything looks like a nail -- but some things really are nails, and polygamy really is an intrinsically abusive institution which merits destruction by Leviathan. If society has any uses at all, this is one of them.

[I was taken to task by a commenter who had better thought through the legal issues:
OK, so polygamy is inherently abusive and society should crack down on it. So kindly explain the difference between the FLDS system of polygamy, and the modern practice of couples moving in and out with each other and siring children out of wedlock. Does the former require Leviathan's intervention, but not the latter? If so, why; and if not, why not? Do both require it?
See, here's the problem. The FLDS girls were never legally married to the older men, so the men can't be prosecuted for bigamy unless you define "marriage" to include people who live together as husband and wife. But by shooting with that blunderbuss you also consider all kinds of umarried couples as being common-law married. Now this approach to polygamy has been tried; Utah had "unlawful cohabitation" statutes for a long time. You can see how well it worked. "Unlawful cohabitation" as previously defined is at an all-time high in our country; and any attempt to crack down on it might run smack into Lawrence, if it doesn't first induce mass protests. Our society is currently in favor of cohabitation, for better or for worse, as witnessed by the development in many locales of domestic partnership registries (including, recently, Salt Lake City).
Personally, I think the best approach has been Utah AG Shurtleff's approach: live and let live, but prosecute the underage stuff and the welfare fraud.

I replied:
All these are good points. However:
Doesn't the existence of cohabitation registries provide a check which can be used against polygamy? The state should keep the total of marriage partners plus cohabiting partners to a maximum of one.
My post was largely in response to those who would use the FLDS situation as an argument in favor of explicitly legalizing polygamy; your arguments, on the difficulty of prosecution without diminishing other freedoms, are valid but do not extend so far as to require such legalization.
Thus I prefer that the crime of polygamy should remain in Mr. Shurtleff's arsenal.

This may be my least-libertarian post.]

How To Poison a Well

2009-03-30T10:07:00.004-04:00

Glenn Reynolds points to Congressman John Murtha's defense of his aggressive earmarking practices:

“‘If I’m corrupt, it’s because I take care of my district,’ Mr. Murtha said.” And the beneficiaries of pork in his district take care of him.

They take care of Mr. Murtha by providing a good supply of funding for his re-election, which is used to buy advertising and other forms of positive press coverage. So far this has worked.

There is an effective tactic which can be used to reduce the electoral benefit Mr. Murtha can reap from this funding. That is to advertise against his corrupt dealings, and to explicitly and repeatedly note that he uses the money to promote himself. The idea is to create a mindset among undecided voters such that Mr. Murtha's campaign ads will reinforce the idea of his corruption -- to poison the well into which re-election donations feed. For example:

John Murtha calls it "taking care of his district". We call it a corrupt porkfest. John Murtha added hundreds of earmarks to make sure your tax dollars were spent the way his campaign donors wanted. And now those donors will pay for billboards, and radio and TV ads, supporting John Murtha and attacking [insert name here]. They'll pay to make sure you get the message. Because John Murtha is the man they want; because they know he'll represent them, not you.

This tactic is not specific to Mr. Murtha, or to Democrats. It seems it could help to reduce the efficacy of corruption.

Well, I'm Back

2009-03-30T10:05:00.004-04:00

Congratulations to Mr. Yousefzadeh on his new role. Over the next few weeks I will be cross-posting archived items from Chequer-Board, possibly with minor updates, and also generating a little new content.

Fame!

2008-05-13T12:43:00.002-04:00

A cogent exegesis by Myron Magnet.

RV

2008-05-13T04:07:00.002-04:00

At InTrade as of this writing, Hillary Clinton's odds of gaining the Democratic nomination are offered at 9.1% (in a wide market), while her odds of willing the Presidency outright are bid at 6.5%. So, even after crossing bid-offer spreads, you can effectively sell Hillary-to-beat-McCain at over 71% -- and a couple of hours' patience might improve that by 2-4%.

I think someone is leaning on the market. Why not go over and make it expensive for him?

Looks Like a Nail

2008-05-08T11:28:00.001-04:00

A brief against polygamy, at Chequer-Board.

Holman Jenkins, Homeowner

2008-04-03T12:17:00.002-04:00

I am still exercised about Mr. Jenkins's evil and incredibly stupid editorial in the Wall Street Journal.

But another option has hardly been considered in Washington, though it's old hat in the sticks: Using tax dollars to buy and demolish foreclosed, unoccupied or half-built houses in selected markets.... Cleveland spends $6 million a year to demolish buildings. Dayton plans to demolish 550 this year. Only a small mental adjustment is required to begin aiming these bulldozers at "new" homes too. Get over it.
Knocking down surplus homes would be the most efficient and equitable way
to spend taxpayer dollars.

[Emphasis mine.] An unpleasantry is not sufficient response to this. Half Sigma summarizes the real effects:

This is just a negative sum transfer of wealth from the poor (people who rent or are even homeless) to the well off (people who own homes and big corporations that built too many homes and can’t sell them).

So it's clear that the manifest and overwhelming negative of this plan -- there will be fewer houses for everyone to live in -- is less important to Mr. Jenkins than some prospective gain. I would guess that Mr. Jenkins owns a home whose value he does not want to see reduced, and possibly has some personal stake in the stability of the leveraged financial system around him. This at least would give a patina of comprehensible avarice to what is otherwise stark lunacy.

This plan is as "efficient" and "equitable" as my beating up a homeless guy to steal his quarters.

False Advertising

2008-03-03T09:47:00.002-05:00

My suspension of disbelief failed at Image 1 of this list, "Lava Rises from the Deep". It purports to be an image of Big Island's base... a photo of something 3 miles underwater. This image was not "taken primarily in the infrared spectrum"; it was computer-generated.

Downward Mobility

2008-03-03T05:11:00.002-05:00

To update an old joke:

Q: How do you build a top-30 university?
A: It's easy; start with a top-10 one.

This is what the Duke University administration has been busily doing for two years now. Their latest newsmaker -- petitioning to shut down the website of the students who are suing the university and town -- is at least comprehensible: the administration is simply playing the bad hand they have dealt themselves.

Duke's rise as the uncontested flagship of the New South was amazing. In the 1980's, there was not much to choose between Duke and Georgia Tech; Rice was better at sciences and engineering, and U. Va. was better at everything else. Then, somehow, everything blossomed at once: Duke's bulked-up arts and humanities departments won top rankings, while its students won mathematics and computing competitions, and [perhaps most amazingly] it punched through the wall of northeastern self-regard to appear regularly in the U.S. News top five.

But a university is run by, and largely for the benefit of, its faculty. And that faculty, which had driven Duke's rise, naturally had a feeling of power and of secure rightness. They had come to this comparative backwater, and built it into something great, and that was a manifestation of their own intrinsic excellence -- and, for those trafficking in normative issues, of their tendency to be in the right. The politicized portion of the faculty would be irresistibly tempted by the case of the lacrosse players; and who could hold them back?

A university is sustained, over periods of decades, by the deep pockets of grateful alumni [especially those with marginally qualified teenage children] and by the confidence of top faculty that their efforts can be best rewarded there.

Who will be grateful to Duke now? Do its alumni now look forward to being able to announce their affiliation? And would they move heaven and earth -- or at least their bank accounts -- to expose their children to its lawless, envious, back-stabbing environment? I expect that the answers to these questions will be increasingly and embarrassingly clear.

Will the faculty, and the next generation of faculty, still look to Duke as the best avenue for their own advancement? Constancy is not one of the virtues this group has so far demonstrated; and the effort to convince young talent to cast their lot with a high-risk school will be difficult.

Duke is headed back into the obscurity from whence it came. Once again, U.Va. will be older; Rice will be better; and Georgia Tech will be cheaper.

Discovery Process

2008-02-27T04:38:00.004-05:00

It is not often that the perspicacious Tom Maguire is naive, but his surprise at a Washington Post editorial is just that:

The WaPo offered a laugher of an editorial Sunday, as they tried to figure out Obama's true political leanings... if the answer is not clear it is because the WaPo is in denial of the evidence in front of their eyes.

McCain is the extremist, and his bipartisan efforts will be forgotten now that his opponent is a Democrat. Obama is the centrist, and the fact that he never moves rightward will be ignored. That's the narrative; get used to it.

Though the Powerline title, "A Centrist with No One to His Left", is well said.

Recommendations

2008-02-25T12:36:00.002-05:00

James Poulos on the possible future of the European Union:

Eventually the sub-states that will appear in Europe will be as contingent as anything else, mostly decorative arrangements without any real power. Oh, except extralegal gangs of enforcers will prowl around stabbing filmmakers and kicking in heads, as 'marginalized' youths of every stripe from suicide bomber to skinhead will band together in small but extremely annoying clumpets to enforce the 'law' of their cliques on those who presume to transcend them. Politics as we once knew it will thus in effect be criminalized. Everyday life will be unprecedentedly commodious and choice-glutted but also at an unprecedented level of crisis, anxiety, and gnawing nihilism. The need for security -- personal, physical, communitarian, psychological, economic -- will become an obsession. Cameras will be everywhere. Gendarmes, almost entirely undercover, will silently prowl every street and restaurant, secretly bristling with networked technological surveillance and protection enhancements. Bombing will be the new mugging, but bombing will also be as rare as mugging in secure areas.

Kevin Drum gets outside himself:

Not "Would you like the power of invisibility?" Rather, "Would you like other people to have the power of invisibility?" Well, would you?

And Mr. Drum again, on the New York Times:
Times reader aren't children. We all know what this means, and we all know perfectly well that the Times piece loudly insinuated some kind of inappropriate romantic involvement between McCain and Iseman. So far, though, the Q&A has addressed only the peripheral subjects of what "Long Run" pieces are like, what the Times' policy on anonymous sources is, and the Chinese wall between the newsroom and the editorial page staff. Riveting stuff.

And a British brain drain:
Record numbers of Britons are leaving - many of them doctors, teachers and engineers - in the biggest exodus for almost 50 years.

Over a quarter of qualified professionals who have moved abroad had health or education qualifications. There are now 3.247 million British-born people living abroad, of whom more than 1.1 million are highly-skilled university graduates.

Hyperlocal

2008-02-21T12:42:00.001-05:00

In the Kansas City Star:

Local Sailor Blasts Dead Spy Satellite

In the Tampa Tribune:

Military Plane with Iraqi Markings Lands in Venus

Anyone, it seems, can go to space.

Spam

2008-02-20T06:15:00.003-05:00

The aim of maximizing transparency points toward a possible solution to the problem of spam. The enablers of spam are the companies that sell customer data, which brings them a little extra income at no financial or reputational cost.

Possible solutions to this problem generally involve either forbidding some data exchanges, sometimes with the precarious justification that publicly available data nonetheless somehow "belongs to" those to whom it refers; or taxing the spam itself by taxing all emails, which would be a pervasive nuisance and an intractable enforcement problem. In either case, the value of an individual's privacy is fixed at an essentially uniform level by fiat, rather than chosen by the subject himself.

A better solution would be for the government, in its role as guarantor of transparency, to mandate that sellers of contact information must themselves contact the subject, using the same information that they are selling, and inform the subject of the sale and of the price they received. This would empower individuals by informing them about the paths by which their personal details diffuse about, and would then let data-sellers decide whether the gain was worth the likely affront.

[Cross-posted to Chequer-Board.]

For Example

2008-02-20T05:39:00.004-05:00

This is a story about transparency:

Google refuses to reveal who sent the complaint against Inner City Press, citing privacy concerns.

By placing its emphasis on "privacy", Google has given the activity of suppressing information equal protection with that of providing information. The value of transparency explains why this is wrong: suppressing information should require a public commitment, not just a whisper into Google's ear.

Self-Promotion

2008-02-19T12:24:00.001-05:00

Fidel Castro's retirement seems like a good occasion to refer to my earlier post on how to kill with kindness.

The Transparent Society

2008-02-19T12:01:00.002-05:00

After Glenn Reynolds called David Brin's The Transparent Society "superb" [2001] and "prophetic" [2006], but before he got around to "excellent" [2007], I was moved to actually read it. Mr. Reynolds is, if anything, understating the case.

One of my earliest posts was about the race for power between individuals wishing to be free, and the governments and corporations wishing to coerce or manipulate them. Mr. Brin begins from similar premises, but develops his arguments much further and more concretely.

A specific point which Mr. Brin addresses in detail is the realistic case against "strong privacy" [the idea that electronic communication can provide complete anonymity]. He points out that against the time-honored methods by which governments have subjugated their citizens -- such as torture of a suspect's associates -- an encryption-based defense would be no defense at all. He also discusses the impact of the technological imbalance, for example the likelihood that governments will obtain housefly-sized surveillance devices [to watch your keystrokes] before individuals obtain defenses against them. His argument is compelling: strong privacy is feasible only when it is not truly needed.

I would like to focus on a related issue: strong privacy is also destructive to the society that attempts to support it. Its advocates see themselves, with some justification, as an elite vanguard who are taking special measures to protect their own privacy; thus they do not consider the effects of truly widespread anonymity. But anonymity is a short step from anarchy, or at best from a weak and unstable form of anarcho-capitalism.

Society is held together by trust; trust requires knowledge of True Names. If I deal only with temporary personas, which can be cast aside by the wearer if they lose their credibility, there is a hard upper limit on the trust I will ever be able to muster. ["Sammler", for example, is disposable and thus less deserving of trust.]

We live by trust; but the structures that support trust can be used for coercion. Transparency, letting us watch those who are watching us and expose those who wish to control us, is the only way to let trust and freedom coexist.

[Cross-posted to Chequer-Board.]

A Quibble

2008-02-15T05:57:00.003-05:00

Glenn Reynolds laments:

Too bad stooges for Big Oil managed to monkeywrench nuclear power for several decades in the 20th century.

This is not strictly accurate: nuclear power competes, on the margin, not with Big Oil but with King Coal.

Noticed

2008-02-14T11:18:00.003-05:00

James Surowiecki reviews Ha-Joon Chang's Bad Samaritans, and notices:

What Chang does in Bad Samaritans is assume that the interests of the nation trump those of its citizens. Protectionism of the kind Chang advocates is bad for a country’s consumers—they have to pay more for less, the quality and variety of what they can buy goes down, and so on. Yet Chang is essentially indifferent to this problem.

It's the "Nations Are People Too" fallacy.

[HT: Arts and Letters Daily, via Belmont Club.]

Pull to Par

2008-02-14T10:38:00.003-05:00

I explained last week why John McCain is going to be crushed in the general election. However, conservative dissatisfaction with Mr. McCain has led some people -- not just the execrable Ann Coulter -- to seriously suggest "sitting this one out". Daniel Henninger has a reasoned explanation of why this is a stupid idea, but he is insufficiently blunt.

What do political parties do when they find themselves in the minority? They move to the center.

What lesson will anyone outside the conservative cocoon draw if Mr. McCain runs far to the right -- as he will be forced to -- and is crushed by a huge margin? This will prove the non-viability of conservative ideas, and force the party leftward. True believers will try to attribute Mr. McCain's loss to his lack of conservatism, but they will convince no one.

Barack Obama's supporters have the privilege of sitting this one out, or of casting protest votes for the Green party to show a constituency on the far left. Conservatives are like contestants in a tug-of-war who find themselves pulling uphill, and are now debating dropping the rope and walking up the hill alone to lead by example.

[Cross-posted to Chequer-Board.]

Growing

2008-02-13T11:11:00.003-05:00

Melanie Scarborough argues that colleges are sufficiently well-endowed that Congress should reduce tuition assistance:

The demand for more college seats creates a demand for more financial aid, and Congress blithely complies. Last week, the House passed a measure to spend an additional $20 billion on financial aid to students — the biggest boost since the G.I. bill of 1944. It did so not only without asking whether all the students eligible for financial aid need to be in college, but whether the colleges they will be attending need the additional money.
Last year, the average college endowment increased by 17 percent. Dozens of schools now have endowments of more than $1 billion — and it isn’t just the heavy hitters such as Harvard University, which has an endowment of $35 billion. The University of Maryland’s Great Expectations campaign set a goal of $1 billion.
Even the University of Delaware’s endowment tops $1 billion. Spending just 1 percent of that money on financial aid would free $10 million for scholarships. When so many schools are flush with money, why does Congress continue to soak taxpayers?
Throwing money at schools that don’t need it to spend on students who don’t deserve it defines government waste.

One question is never asked, because too many people have a vested interest in not hearing the answer. To wit: To what extent is college education a public good?

I maintain that a supply of engineers, doctors, and other Sons of Martha, above what the free market would provide, is indeed a public good: precisely because these are the professions whose successes -- for example, a successful surgical operation, or a bridge that remains standing -- are unalloyed gains, rather than transfers.

This is in contrast to the competitive professions, notably law and investing, which produce social goods only in a very indirect way: better lawyers on average mean more predictable and faithful execution of the law, but in any specific case they attempt only to gain advantage for themselves. In any case, it is generally recognized that these highly compensated professions are their own reward.

The answer everyone knows, but no one wishes to say, related instead to the nation's legions of "fuzzies": media studies, art history and comparative literature majors. Here, rather than defend the dubious proposition that education in these subjects (in the minority of cases where that education is completed and used) adds social value, the backers of universal college education emphasize "personal growth" and "exposure to different ideas".

These concepts are not just profoundly selfish -- why should taxpayers fund your "personal growth" just because you happen to be 18-22 years old? -- but also insulting to anyone who actually works for a living. It implies that working, unlike sitting in lecture halls and attending afternoon keg parties, does not lead to any growth. But of course the truth is the opposite: that's why they call it growing up.

Use of Weapons

2008-02-12T04:32:00.000-05:00

The men get tired of their wives. Or bored. Or maybe the wife objects to her daughter being forced into a marriage she doesn't want. Or maybe she starts wearing western clothes. There can be many reasons. The women are sent for asssessment to a hospital. The GP referring them is Muslim. The psychiatrist assessing them is Muslim and male. I have sat in these assessments where the psychiatrist will not look the woman patient in the eye because she is a woman. Can you imagine! A psychiatrist refusing to look his patient in the eye? The woman speaks little or no English. She is sectioned. She is divorced. There are lots of these women in there, locked up in these hospitals. Why don't you people write about this?

Government is coercion. More precisely, government delegates to its functionaries power over its subjects. This is what power looks like.

[Context here; via Ross Douthat. Cross-posted to Chequer-Board.]

None So Blind

2008-02-12T03:43:00.000-05:00

In a Fox News editorial, professor Susan Estrich writes:

That was, according to the pollsters, the problem: about 10 percent of the electorate claimed that they were going to vote for [Tom Bradley, who is black], and in many cases even told pollsters that they did, but they lied.
Shocking. Racism in America. Who’d a thunk it?
Doug Wilder, who wasn’t elected to the Senate from Virginia, faced the same problem. We who are Democrats would like to believe that race is not a factor in the polling of our party members, but maybe we’re wrong.
No one doubts, or at least no one who is honest does, that both racism and sexism come into play as people decide between Clinton and Obama, but could it be that people are more willing to admit that they won’t vote for the woman than that they won’t vote for the black?

The problem with this analysis is that it assumes exactly what it purports to prove: that any difference between exit polls and actual ballots is due to secret anti-black animus which emerges only in the privacy of the ballot box.

It is equally possible that the difference arises in precisely the opposite fashion: that voters are eager to tell pollsters how they're going to vote for the black. Perhaps they are not hiding truly anti-black feelings, but are pretending to pro-black feelings they do not actually possess. Steve Sailer calls this "status seeking", which seems partly true.

Ms. Estrich does not appear to have any plan for disambiguating these two complementary effects. She thinks she has found racism: but she has seen only her own expectations. We should all get used to this cheap substitute for analysis, because we are going to see a whole lot more of it.

[HT: Glenn Reynolds. Cross-posted to Chequer-Board.]

Black Ops

2008-02-11T10:41:00.000-05:00

Intermittently, some self-styled "progressive" will attack an opposing viewpoint by claiming that it shows the repressed homosexuality of its advocate. Most of the left is not happy with these tactics, and of course the right greets them with contempt.

Despite their lack of apparent impact, these appear frequently enough that it is worth understanding them. The posters imagine that they are saying something which, if widely known, would be devastating: they cannot accurately gauge what the reaction of real conservatives would be, but they can gleefully imagine the reaction of the straw-man conservatives they simulate internally.

These accusations are meant to be a kind of information warfare, making conservatives turn against their own. This shows the perils of undertaking this kind of operation without at least some understanding of the enemy.

Vengeance Is Mine

2008-02-08T05:59:00.000-05:00

[Contains spoilers for several Iain Banks novels, particularly The Crow Road and Complicity.]

Scottish novelist Iain Banks is a prolific writer of both science fiction and realistic novels. His science fiction is centered in the "Culture Universe", so named for a group of humans, and their benevolent posthuman masters, called "The Culture".

A couple of Mr. Banks's earlier novels, particularly Consider Phlebas and The Crow Road, show an intellectual opposition to religion: the former takes place during the Culture's war against the religiously motivated "Idirans", while the latter is largely a coming-of-age story, leading to protagonist and narrator Prentice MacHoan's willingness to accept the absence of God and resolve always to vote for Labour.

A slight digression is needed here. The Crow Road is presented as a mystery; what happened to Prentice's Uncle Rory, who has not been seen for eight years? Are other accidental deaths somehow involved? Well, it turns out that The Tory Did It. The narrator never makes this connection, but it is clearly in the author's mind; The Crow Road is a political polemic disguised as a character novel disguised as a mystery.

Soon afterward, Mr. Banks wrote Complicity, this time a mystery about a sadistic vigilante killer and the slacker journalist who is wrongly suspected. Complicity is striking, in an ugly way, in that the killings are given their own chapters and told in the second person. I was about halfway through when I realized that The Tory Did It. With a sigh of relief, I skipped a hundred or so pages and three second-person murders, scanning for the denouement. But I was wrong; the Tory did not do it. However, the real killer, as part of his tell-all-before-slaying-the-narrator confessional, mentioned that [ta-daaa!] he had voted Tory in the last election. Support Margaret Thatcher's economic reforms; kill old bureaucrats on weekends; it's all the same, really.

Thus Mr. Banks's novels must be understood, at least in part, as arguments against those who do not share his vision of a kind, egalitarian, godless society. But he is not so singleminded as that might suggest. For example, the murderees in Complicity are chosen for their involvement in an obscure scandal; they have covered up some risks associated with nuclear power, with possibly fatal consequences. Thus in some indirect way, they have proven themselves evil, and their destruction becomes meritorious. This is the meaning of the title: the reader is indeed complicit, and the "you" who kills is a highly sympathetic character. The first killing ends with:

You feel suddenly elated. You're glad you didn't have to hurt the women.

Now we turn to the science fiction. Probably the best of these space operas is the grim and unremittingly violent Use of Weapons; again, the theme is revenge and punishment. The protagonist, Zakalwe, is sent by the Culture to various backward civilizations to set things right, and a large part of the book details his fabulously unpleasant adventures. When the Culture restricts his latitude to righteously smite the wrongdoers, he goes "freelance" -- assassinating a genocidal ruler in his bedchamber, for instance. Even when he is off duty, the pattern recurs: the book's most memorable scene is when Zakalwe exposes and defeats a sex murderer, but leaves him alive (for a change) to face the rough justice of his society.

But Zakalwe, for all his training and skill, is only human, and there is a limit to the justice he can mete out. The Minds that rule the Culture are not so restricted.

In Excession, a Mind called Grey Area (but nicknamed by its colleagues Meatfcuker) makes a personal mission to bring vengeance to living creatures who have oppressed or slaughtered others; and, unlike Zakalwe, it uses its power to make them relive the thousands of deaths they have visited on others. One might wonder whether Grey Area is Mr. Banks's parody of God; but at the end of the book it is absorbed by a still more advanced being from another universe -- an ascension into Heaven if ever there was one.

Mr. Banks's own emotional involvement is best shown in the later novel Look to Windward. The majority of this book is painfully adult, mentioning physical pleasure or pain only as informers to the tortured psyche; just once, after the main action is over and the Dastardly Plot foiled, does the author cut loose. The two main perpetrators of the plot are brought to justice by "a Culture terror weapon" -- they are tortured to death, in coruscating prose that stands out from the dryness of this novel like Denali about the foothills.

Mr. Banks has given up on God, but cannot bear to let go of Hell: and, in the Culture Minds, he finds his road there.

[Postscript: it could be argued that my own perceptions, rather than a change in Mr. Banks's writings, are responsible for my perceiving some passages as being extraordinarily vivid. Those who have read Use of Weapons or Look to Windward are invited to comment on whether the two scenes I have mentioned are, in fact, distinctive in themselves.]

[Cross-posted to Chequer-Board.]

Ghost Brigades

2008-02-07T08:58:00.000-05:00

[Contains mild spoilers for Old Man's War and its sequels.]

A couple of years ago, when I read John Scalzi's Old Man's War, I couldn't find anything nice to say about it. This was extremely uncharitable of me, because it is a fine and entertaining book: not really as good as The Forever War, against which it is measured, but good enough to deserve the comparison. Instead of noting this, I said:

In Old Man's War, as in David Brin's sequence of space operas beginning with Startide Rising, humanity attains interstellar travel only to find itself in a universe crowded with largely hostile aliens... the aliens are irrational because they're all crazy religious freaks!

Mr. Scalzi not only noticed, but responded with a comment longer and better written than the original post, saying in part:
I don't think it's inappropriate to show alien cultures influenced by their religions, as among other things our cultures so clearly are. I also don't think it's inappropriate to show humans having biases or misunderstandings of the religions and cultures of those they fight, since (again) that's something that's not unknown here in reality. I do agree that in the narration the aliens are seen as incomprehensible and irrational, but the question to ask is: Is that because they are (and, additionally, that it is due to their religion), or because the humans in the story are working from bad premises? Are the humans in the book taking seriously the tenets of faith of those whom they fight against?
I have my own personal opinion on the matter, of course. Yours may (or may not) vary from this. There's a lot that's left ambiguous in the text partly so I could expand on it in future books (and partly because the book has to end sometime) but also because I think it has the potential to engender discussion and debate (like this).
I will say this: There's a character in the OMW sequel The Ghost Brigades who is both alien and religious; I also think he's the most morally-engaged person in the story, and his moral point of view ends up being -- in my opinion -- the heart of the story.

Unfortunately, by this point one of the Good Little Capitalists had sequestered my copy of The Ghost Brigades, so it was some time before I was able to evaluate Mr. Scalzi's claims. As the reader may already have noticed, they reduce to pointing out that the humans are unreliable narrators, and the aliens need not appear rational from their viewpoint.

This is a valid defense, though it may be post hoc. It is clear in The Last Colony (the third book of the series) that humans have no special moral advantage in Mr. Scalzi's universe; and, at the time of the above exchange, Mr. Scalzi was already writing that book. This ambiguity is not manifest in Old Man's War.

The Ghost Brigades is the most interesting book of the series. It shows both Mr. Scalzi's improvement as a writer, and also the loss of innocence in his -- and America's -- thinking about war. [This is not to say that these novels are in any way allegorical: they are not. Nor that Old Man's War disregards the pain and loss of war: it does not.] The Old Man's War is reminiscent of the Pacific campaign of World War II: cruel and slaughterous, but according to terms agreed by both sides, allowing combat with honor. The Ghost Brigades is informed by the spirit of Vietnam and Afghanistan: it shows special forces soldiers, not striving in combat, but kidnapping, murdering and being murdered.

Mr. Scalzi is a thoughtful guide through this new moral maze: his writing, more mature and confident than before, brings his not-quite-human characters to realistic life, and shows their dilemmas, and often their deaths, in heart-wrenching detail. My only criticism of The Ghost Brigades is that it simply isn't fun in the way Old Man's War was; and, given the nature of the story being told, it seems callous even to notice this.

[I thank Mr. Scalzi for responding to my earlier post, and for two really excellent books; and I apologize to anyone who noticed the two-year delay in this response. Cross-posted to Chequer-Board.]

Tales from Reality

2008-02-07T04:21:00.000-05:00

The following have leaked in from my First Life:

Antiwar Protests
No to Contempt Religion
My Argument with the Pig

My Argument with the Pig

2008-02-06T05:17:00.000-05:00

Context

I attended a Roger Waters concert last year; I even persuaded my wife to come along. I had a cold at the time, but it turns out that beer is an excellent cough suppressant.

The Man

Mr. Waters, whom we remember as the tall, horse-faced fellow looming in the back of old Pink Floyd group photos, is now startlingly muscled. His demeanor has also changed; no longer a poet of gloom and angst, he is now clearly a man of the world, visibly enjoying his stardom.

Mother

A trio of black women supplied the wailing background vocals for such songs as "Great Gig in the Sky" [which, despite cleaving faithfully to the album version, somehow seemed even longer than usual]. One also sang the part of "Mother" -- a weirdly naturalistic touch, given how accustomed we are to David Gilmour's puissant ersatz Mother. The effect was a less dramatic, more ordinary sound; it was not helped by the singer's inability to reach the lowest notes of the song.

Mama's gonna make all of your nightmares come true
Mama's gonna put all of her fears into you

Dave

David Kilminster played an excellent lead guitar. He also showed a physical resemblance to Mr. Gilmour, even to the point of showing the same jowliness.

The Pig Wins

The reputedly terrifying Pink Floyd Pig has been replaced by a relative of the helium-filled indoor blimps sold at hobby shops. Presumably under remote control, it drifted slowly out of the shadows in stage left. It appeared to be about twelve feet long.

As the pig emerged into the stage lights, it became apparent that it had been vandalized: various anti-war and anti-American slogans were crudely daubed onto its pink hide. It bobbed gently near the front of the stage for some time, not looking like a formidable debating opponent. But after fifteen minutes or so, it turned to moon the audience and showed one haunch saying "Habeas Corpus Matters". And the pig was right.

Leaving Something, Anyway

Mr. Waters performed only two solo songs, but one of them was the album-length Leaving Beirut. The song is long but not varied: this is not "Atom Heart Mother Suite". I believe it is subtitled "This would be a good time to get a beer". Those willing to read the linked lyrics will recall the apostrophe used so powerfully in The Final Cut:

What have we done? Maggie, what have we done?

Here the trick is repeated, but the effect is quite different. I could not resist some malicious good cheer at the thought of earnest leftists, predisposed to agree with the song's political points, trying against all odds to enjoy the song itself. This cannot be accomplished. It makes "The Fletcher Memorial Home" sound like "Comfortably Numb".

Miscellany

Nick Mason arrived on stage, to fanfare, after the intermission. Weirdly, when "The Happiest Days of Our Lives" was played as an encore, he sat passively through its climax, as if drums were not needed for that bit.

"Set the Controls for the Heart of the Sun" was a nice nod to back-catalog fanatics, though the elegiac video displays of the middle-class English youngsters at play were a distraction; presumably they have some personal resonance for Mr. Waters.

To my amazement, the set included "Southampton Dock", the best antiwar song ever.

[Other Tales from Reality.]

Feels Like Up To Me

2008-02-05T08:27:00.000-05:00

Al Meyerhoff, Huffington Post blogger, has a rather coy by-line on a recent editorial in the Los Angeles Times: it says merely that he "is of counsel in a law firm specializing in securities fraud cases." [Sic.] In reading the editorial, "Financial forces run amok", this demonstrates substantial explanatory power. But it is not the full story; Mr. Meyerhoff is not merely of counsel, but a partner; and a partner at Lerach Coughlin, no less. One admires his humility in not advertising this fact. If I had helped to extract $45 billion from publicly owned companies -- in the name of protecting their shareholders, no less -- my pride would know no bounds.

I would have contented myself with a mere unpleasantry to this effect, but then I read the article more closely. It is a marvelous window into a looking-glass world... but let's let Mr. Meyerhoff describe it.

For about the last 30 years, our nation has been traveling the deregulation highway, a road with no rules or direction. We have let enterprise be free, business go unfettered, the good times roll. And roll they have, but to where? One stopping point: the current mortgage crisis.

The good times have indeed rolled; Mr. Meyerhoff has at least that much contact with reality. Thus we will refrain from criticizing his implicit denigration of freedom.

Recently, however, there has been a slight regulatory bump in the road. After its chairman acknowledged that "market discipline has in some cases broken down," the Federal Reserve released new mortgage lending rules "to protect consumers against fraud [and] deception." Banks making sub-prime loans will be required to actually consider the borrower's ability to pay and confirm a borrower's income before handing over the money. Now there's a radical notion.
Disclosure also will be required of those nasty little (actually not so little) "bonuses" that brokers receive for writing loans at rates higher than a poor, unwitting consumer can afford.

So "poor, unwitting" consumers will be protected by not being allowed to borrow.

To some, they may not be much, but the absence of such rules encouraged the predatory lending practices that have left millions of Americans facing foreclosure.
Let's take a look at how we got here before the deregulation highway takes us over a cliff.
The Reagan revolution was the beginning, when we started seeing rollbacks in government safeguards, such as those protecting food, drinking water and the environment. Then came the savings and loan crash in the 1980s, a pit stop that cost taxpayers $150 billion. President Clinton added the "bridge to the 21st century," along with his proclamation that the "era of big government was over." During his administration, Congress repealed a Depression-era law called Glass-Steagall, which kept banking and investment separate. Henceforth, banks could offer investment advice as well as loans -- one-stop shopping on the road to disaster.

I must grant that food, drinking water, and even an environment are good things, which is why Mr. Meyerhoff is attempting to associate his cause with them. The last two sentences, however, are the meat of the argument: like a dancer's arms circling to gain torque for the forthcoming pirouette. It should be noted that banks do not need investment banks to get into financial difficulties. Mr. Meyerhoff's long and distinguished career stretches back not only to the near-collapse of Manufacturers Hanover [dented in 1984, scrapped in 1992] but to the de facto government bailout of banks with substantial emerging-markets exposure [by lowering short-term interest rates, permitting them to ride the carry trade back to health] in 1982.

Let's also spare a thought for the liquidity crisis triggered by the collapse of Long-Term Capital Management. This was a trading, not a retail banking, crisis: at no point were Mom-and-Pop depositors threatened. Indeed, the deep pockets of the new universal banks, which Glass-Steagall had outlawed until its repeal, were crucial in preventing the downfall of the trading system. But where other observers might see triumph, Mr. Meyerhoff sees "disaster".

Next we have the pirouette itself: it seems that the real victims were not the "poor, unwitting" consumers of oversized houses, but the shareholders of immensely profitable banks:

However, deregulation of the markets really took hold in 1994 with the GOP's "Contract with America." The first to go were the nation's securities laws. Over a Clinton veto, Congress enacted the Private Securities Litigation Reform Act, making it far more difficult to prove securities fraud. Said to be necessary to free the markets of red tape and trial lawyers, it gave the green light to corporate chiefs such as Ken Lay and Dennis Kozlowski and led to the Enron, WorldCom, Tyco and HealthSouth fraud debacles. As a result, shareholders lost hundreds of billions of dollars from a wave of fraud unseen since the Roaring '20s -- and maybe not even then.

That explains why those foolish enough to buy shares in 1994 were so much poorer in 2000! Also, I am relieved to find out that Lay's and Kozlowski's actions were government-approved: I had been under the impression that something bad might have happened to them.

A declawed Securities and Exchange Commission, a neutered plaintiffs' bar and missing congressional oversight empowered Wall Street to push as far as it could. Facts were hidden, self-dealing was rampant and deceit rewarded. Congress finally intervened in 2002 by passing the Sarbanes-Oxley Act, imposing strict new accounting rules and other controls on business. That law is now under siege.

Emphasis mine.

The current sub-prime mortgage mess is simply the latest wreck on the highway. Banks have been left to their own devices, unchecked by government watchdogs or pesky regulations. Interest rates on millions of mortgages are set -- like time bombs -- to accelerate in 2008. Defaults of $1 trillion are predicted -- affecting not only large institutions such as pension funds, hedge funds and universities but also countless average Americans. Hand-wringing time? Just consider these recent events:
* Moody's and other such agencies have threatened to downgrade the ratings of securities that are based on mortgages that allow accelerated payment -- with far more bad paper still out there.
* To avoid bankruptcy after its stock plummeted because of record high foreclosures, Countrywide Financial is being acquired by Bank of America.
* Money managers including Bear Stearns and investment bankers Citigroup, Merrill Lynch and Washington Mutual are under investigation for fraud and allegedly making Enron-like off-balance-sheet transactions.
* Of the nearly 3 million sub-prime adjustable-rate loans surveyed by the Mortgage Bankers Assn., a record 18.81% are already past due.
What clearer evidence do we need that markets do not regulate themselves? Yet the government response has been mostly timid.

Let's review the bidding. Companies that made bad loans might lose money. Ratings agencies might change their ratings. Weak companies can be acquired cheaply by stronger ones able to buy during market downturns. Other lawyers, perhaps unlike Mr. Meyerhoff, allege that some losses were due to fraud -- not exactly an admission against interest. And yes, some bad loans are being repaid behind schedule; some far lesser fraction will actually default. Somehow we are meant to see this as evidence that we should have government intervention, modeled on the Sarbanes-Oxley act that costs shareholders $5,000,000,000 yearly.

The Fed's recent rules allow action against predatory lenders only on showing a "pattern and practice" of unlawful conduct; disclosures of "yield-spread premiums" -- kickbacks -- can still remain buried in a mountain of loan documents. Prepayment penalties make it nearly impossible for good-faith borrowers to get out from under bad loans. The Bush administration's voluntary mortgage rate "freeze" will reach less than 25% of borrowers.
Politicians of every stripe are running scared -- and for cover. Yet Republicans and some Democrats (lining up at the Wall Street trough) are actually still calling for less regulation of U.S. markets.
It is time -- it is past time -- to get off this deregulation highway. We need more government, not less, to protect us against banks and conglomerates and the sheer concentration of power they portend.

Calling for the heavy hand of government as an antidote to "concentration of power" is a feat of willful blindness.

We need the SEC to change from Wall Street lap dog to aggressive advocate for the public interest. Instead of holding round-tables with corporate lawyers to find ways to prevent shareholder lawsuits, it should act, for example, on an investors petition to require polluters to disclose their multibillion-dollar liability for climate change. And the Justice Department needs to be the people's law firm again -- not house counsel for big banks and corporations, as has been the case in every major fraud and antitrust lawsuit before the Supreme Court of late. And Congress needs to enact and send to the White House the proposed Mortgage Reform and Anti-Predatory Lending Act to strengthen consumer safeguards against rapacious bankers and their Wall Street enablers.
Change, it is said, is in the wind. There is no better place to start than reining in the robber barons of the 21st century.

Erm, Mr. Meyerhoff: that would be you.

The Pet

2008-01-31T06:08:00.000-05:00

John McCain will never be President. Although he is increasingly likely to win the Republican nomination for President, he has essentially no chance of prevailing in the general election. Here we review the reasons why.

First, Mr. McCain's status as the media's Pet Conservative will end abruptly as soon as he faces a Democrat in a competitive race. Alex Whitlock and I explored this point back in 2005. Mr. McCain's hawkish and conservative stances right now are a silent majority, since he attracts attention only for his deviations from the party line. But a closer look, especially one guided by a well-funded opponent, would show him as the harshest sort of authoritarian conservative. Mr. McCain would run well to the right of Mitt Romney in a general election -- not by choice, but because his opponent and the press would put him there.
An inevitable consequence of this is that the tailwind of steadily favorable press coverage, which has largely propelled Mr. McCain to this point, would reverse. The press has no love for hawkish, name-calling conservatives when they are not opposing other Republicans. Its coverage of Mr. McCain would be unremittingly negative, reversing the "maverick" image he has enjoyed to date. He will be portrayed as a cranky, right-wing authoritarian, which is two-thirds correct.

As partial payment to McCain for supplying them with a stream of "maverick" stories, the press has so far refrained from excavating his closet. This also will not last. Oh, look: Charles Keating! And something tacky...

Having digested this picture, which will be on steady display from the moment McCain clinches the Republican nomination, America's legions of Hillary Clinton haters will march into the polling booths, check that the doors are securely closed, throw up in their mouths a little, and pull the lever -- for Hillary Clinton.

If Mr. McCain is obliged to run against Barack Obama, his situation will be far worse. Mr. Obama may be a party-line liberal, but he seldom ventures further to the left, so he will have an easy task positioning himself as the centrist candidate. Even attacks on his plans for the overwhelming boondoggle of nationalized health care will fall flat: he will simply announce his intention to "carefully investigate options" to see which are "affordable and fair", and Mr. McCain will look like the doctrinaire extremist who isn't even willing to investigate. Others have already made the point about how a debate between these two candidates will look.

John McCain sincerely believes he is his own man. And, as a Senator from Arizona, he is. As a candidate for President, he is the media's creation; and what they have built, they can surely destroy.

[Hat tip: Glenn Reynolds. Cross-posted to Chequer-Board.]

Rewarding Failure

2008-01-30T03:39:00.000-05:00

The collapse in 2001 of Enron's long-running pyramid scheme was, at heart, an accounting scandal. Enron's own accountants were captive to corruption at the top, and external auditors -- whose whole raison d'etre is to produce a true record of financial activity without relying on the honesty of the in-house staff -- failed to detect any problem. Accountancy, as a whole, could not deliver what people expected of it.

The legislative response to Enron's fraud was driven by an irresistible imperative to take some action, and constrained by refusal to reevaluate the premises of the existing system. The result, predictably enough, was to double down on a failure: Congress, especially with the Sarbanes-Oxley act, has sought to address this problem by massively increasing the power of accountants and auditors, and increasing each corporation's reliance on them.

Consider the 2007 credit market turmoil in this light. This problem is, at heart, a rating-agency failure; it is worth understanding this in some detail.

Ratings are important to most institutional investors because of regulatory restrictions on ownership: mutual funds, for example, cannot own "junk" (BB/Ba or lower rated) bonds. But investors tend to seek the highest yield, or equivalently, the lowest price for a bond paying a given coupon. The business of structured credit finance, in the presence of these regulation-induced incentives, becomes a search for products which are attractive to the rating agencies but unattractive to buyers, thus combining high ratings with high yields. Investment banks create such products by bundling low-priced bonds together, then selling claims on part of the resulting bundle. This can degenerate into a contest to best game the rating agencies' models; the existence in early 2006 of AAA-rated paper paying 500 basis points above Libor indicates that such gaming, if it was undertaken, succeeded.

The rating-agency model has proved inadequate for credit risk management, and it cannot be rescued. If ratings agencies are involved in trading, they cannot retain the trust of investors or of regulators; without trading revenue, they cannot keep pace with the modelling capabilities of investment banks or of hedge funds.

Now we turn to the government response. Again impelled to do something, and again unwilling to reexamine their premises, our government is preparing "reforms" which will increase the power of the rating agencies, and the financial system's dependence on them. The government is preparing to force the banks to bail out the monoline insurers, so that debt of questionable quality but insured can continue to be rated AAA, and thus can continue to be used to meet government-imposed regulatory capital requirements. This will still further entrench the ratings-driven system, just when it has manifestly failed.

[Cross-posted to Chequer-Board.]

Carrion Comfort

2007-11-23T03:23:00.000-05:00

Glenn Reynolds has once again suggested that the United States -- which has not yet recognized Taiwan as an independent nation -- should give Taiwan nuclear weapons with which it might defend itself against China.

This idea is just as dangerous, and its cavalier espousal just as irresponsible, as they were two and a half years ago. There's some discussion in the comments, and a summation here.

France's Scargill

2007-09-18T08:57:00.000-04:00

In October 1995, French public-sector workers responded to Alain Juppé's proposed reform of the welfare state with mass strikes; in December, the transportation workers joined them, paralyzing the French economy until Mr. Juppé's proposals were withdrawn.

The leader of the railway strike, Bernard Thibault, thus became something of a hero to French unions and communists. [The Communists are staunch supporters of generous pension packages, especially for state employees.] In 1999, Mr. Thibault became head of the CGT [Confederation Generale du Travail, roughly the French AFL], presumably on the strength of his earlier victory.

Now it is Mr. Thibault who is the most outspoken opponent of Nicolas Sarkozy's proposed pension reforms. The parallels with Arthur Scargill, British labour's hero after his National Union of Miners soundly defeated Edward Heath's government, seem clear.

Mr. Sarkozy's challenge is less intimidating than that faced by Margaret Thatcher in the government's 1979 rematch against NUM, but subtler. The wreckage of the British economy in the 1970's had destroyed Mr. Scargill's moral authority, but Mrs. Thatcher still had a difficult tactical problem to face. France today is comparatively healthy, and Mr. Sarkozy's task is to maintain popular support.

If the French people feel that Mr. Sarkozy's proposals are reasonable, they will blame the discomfort and inconvenience they are about to experience on the unions. But if the French government overplays its hand, it will lose credibility with every cancelled train until these reforms, like those of 1995, are discarded.

Megalomania

2007-09-17T08:37:00.001-04:00

It is starting to appear that the liquidity failure at Northern Rock, which has caused a bank run in England despite intervention by the central bank, was caused by... the central bank:

Lloyds TSB was asked by Northern Rock to mount an eleventh-hour rescue takeover of the troubled Newcastle-based mortgage lender. The two banks held detailed talks, but the Lloyds deal was ultimately blocked by the Bank of England and the Financial Services Authority.
There were concerns among Bank officials that a takeover would cause greater consternation in financial markets. Once the decision to stop the rescue was made, Northern Rock had no choice but to ask the Bank for an injection of funds.

[Emphasis mine.] If this is true, then the Bank of England actively sowed the whirlwind which it is now reaping. With the benefit of even one trading day's hindsight, their rationale seems utterly risible.

Mine!

2007-09-07T10:43:00.001-04:00

Tim Lee has written a very perceptive summary of the political problem caused by increasing foreclosures of non-performing mortgages. He concludes:

I also don’t fully understand what’s so terrible about simply allowing foreclosures go forward. Obviously, it’s always tragic when people lose their homes, but what’s ordinarily tragic about a foreclosure is when someone loses equity they built up over years of hard work. But that’s not the situation here. Almost by definition, sub-prime borrowers are borrowers who put little money down and paid below-market rates for the first couple of years of the mortgage. It is, in short, not that different from renting. As a renter, I hardly consider it a crisis when I have to move every couple of years. So why is the foreclosure of a sub-prime borrower a crisis requiring government intervention?

The first comment is also worth thinking about:

Widespread foreclosures require intervention because they affect housing values, public safety and the tax base, and there's political pressure from the non-foreclosed households to do something about it.

Let's look more closely at these sources of political pressure.
Housing values: the government is under continual pressure from homeowners to inflate housing values, which does not enrich society as a whole and therefore must come at the expense of non-owners (renters and the young). This situation remains out of equilibrium because owners are more stable and more vocal than renters, and so wield more political power. But here the owners are calling for more overt intervention in their favor than previously: instead of distorted tax law, the government must actively shift cash to prevent houses being sold cheaply.
Public safety: this is a new one to me. Perhaps the commenter is afraid of a wave of newly homeless people wreaking havoc in the streets, or of properties sitting empty and gradually subsiding into the weeds. I can't tell.
Tax base: the property tax base is indeed threatened; thus local governments will try to get a bailout -- no matter how inefficient -- from state or federal level governments. But precisely when this threat is most serious, the state governments will themselves be most worried about loss of their own revenue; this pressure should be self-limiting.

In sum, the calls for a bailout are mostly an extension of the current systemic bias in favor of homeowners.

The Big Sandbox

2007-09-06T04:16:00.000-04:00

David Weigel claims that the conservative blogosphere is too hierarchical to create a popular movement like that embodied by Daily Kos:

Now, here's the organizational structure of the newer, smaller, ambitious Victory Caucus. Board of Governors....
An established radio host (who was an early adopter of blogs)/former Reaganite and Nixonite, another former Reaganite, a military author-cum-blogger, and three established bloggers, one of whom is wondering why the right has no Kos. Well, there's your reason. The "netroots" grew because a bunch of people with day jobs built sites with extremely democratic bulletin boards (not that much different from what Plastic.com did half a decade earlier) and left-liberals found them to be fun places to hang out. The "rightroots" are, so far, a bunch of top-down blogs with moderators and old-fashioned, FreeRepublic-style "threads."
Is it really so hard to grok why one of these models is popular and one isn't?

By saying "a bunch", Mr. Weigel gives the impression that there is some readily enumerable group of opinion leaders, hopelessly outnumbered by the free thinkers at Daily Kos. In so doing, he elides the fact that the problem is one of structure, not of participation; and in fact the change required is not cultural but technical.

First, we need to understand why the conservative self-congratulation (exemplified in the update here) about superior trackbacks was misplaced. In an environment dominated by aggregation sites, which themselves capture hundreds of individual viewpoints, there is no need for trackbacks to link to a conversation: the conversation is already right there.

The conservative blogosphere has similar conversations, but they are very widely distributed. In the absence of trackbacks, they would be impossible to piece together; and the technical difficulty at present is that the conversation is diffuse enough that trackbacks, having lost their novelty, are no longer commonly used; while the technical tools which would obviate the need for manual pinging (e.g., that used at Washington Monthly) are unreliable.

Once trackbacks are visible, the conversation is there. Most tracked posts will be small and fast-loading, since most bloggers have no incentive to include pictures and advertisements. Following a debate should be little more time-consuming than gleaning the rational arguments from the noisy background of a single-blog comment thread, and with the additional advantage that the participants must identify themselves and build credibility sufficient for readers to choose to see what they are saying.

In place of the Daily Kos, we can have the entire Internet.

[Via Stephen Green.]

DJIA

2007-07-20T04:35:00.000-04:00

Glenn Reynolds keeps crowing about new records set by the Dow Jones Industrial Average. These are not a bad thing, but they are symptomatic of the fact that the index is measured in dollars. The Euro is now trading at a record-high $1.38 (from $1.32 at the start of the year), and Sterling at $2.05, almost back to the pre-Scargill Bretton Woods level. Large American companies have completely multinational revenue streams, so their value is not really tied to that of the dollar; thus, as the dollar weakens, their dollar price rises.

Additionally, stock in a business with a steady revenue stream is a natural hedge against inflation (since the nominal revenue stream will likely grow at the inflation rate). Thus the fear of inflation, which is always a threat to a country with a weak currency, boosts the stocks of large, established companies -- i.e., of the Dow.

Land of the Free

2007-06-26T10:17:00.001-04:00

In reading Dan Simmons's synopsis of the Iraq war, I came across the picture of Royal Navy hostage Faye Turney, smoking a cigarette during her televised confession. In Iran, unlike England or New York, this is not a crime.

[Update 27 June: Tim Harford addresses the specious economic rationalizations for smoking bans.]

Sowing

2007-06-21T12:38:00.000-04:00

Mark Tapscott paints the broad outline of our rent-seeking legislatures:

This is why there is no evidence of increasing public support for the GOP in recent weeks despite the failling ratings of the Democratic majority in Congress. The root problem is a bipartisan inability - or refusal - to adopt policies supported by clear majorities of the American people. Those policies for the most part involve a significantly lower level of government activism, whereas the political class for the most part seeks only a higher level because it benefits, financially and otherwise, from the higher taxes, greater federal spending and heightened importance of public institutions.

This is the inevitable result of safe incumbency -- with little or no fear of losing their offices, legislators can safely concentrate on how best to reap their benefits.

Kimberley Strassel shows the fertile new ground currently being explored:

It's a green dream come true, carte blanche to promulgate endless regulations barring tree-cutting, house-building, water-damming, snowmobile-riding, waterskiing, garden-planting, or any other human activity. The section is vague ("protect," "assist," "restore") precisely so as to leave the door open to practically anything.

To maximize the value of a good, one must make it scarce. To maximize one's own profit, one must ensure a steady supply of that good. The energy bill is an exploratory venture, an attempt to seed a valuable resource for our rulers to reap in the fulness of time. And here the good in question is developable land, almost certainly the most valuable single thing in our society.

Green groups and other self-appointed protectors will cooperate with lawmakers to accomplish the first goal, throttling development with a hail of regulations and complaints. But when the lawmakers have a hand in the till, whether it be a percentage stake or a favored nephew, the second goal will be paramount; the regulations will not be promulgated, and the green groups will remain silent rather than jeopardize support for the "larger goals". [Among which I do not suppose governmental honesty is paramount. ]

To see the consequences, compare America to England, with its green belts and local development vetoes. The average American home buyer spends 3.5 years income to buy 700 square feet per person; the average Briton spends 7 years income to buy 350 square feet. This is not due to England's greater population density -- huge swathes of the countryside are empty. It is the deliberate result of regulations designed to favor the ruling and landowning classes.

On the plus side, your air-conditioning bills will be low.

[Via Glenn Reynolds and Bruce McQuain.]

No Quarter

2007-06-19T03:54:00.000-04:00

Marc Danziger has written an extremely perceptive essay on the breakup of MyDD and the new aristocracy. Read the whole thing, but here is the heart of it:

That aristocracy is increasingly detaching itself from the interests of the modern proletariat - those who sell their labor a day or month at a time in a cubicle or restaurant uniform. The modern proletariat is the richest in the world - but in a flattening world, that can't and won't persist. To those who ride in Town Cars, that's not a horrible thing - the help gets cheaper, after all, and more docile as it realizes how close it is to the edge and how their island of social and economic stability is shrinking.

Chris Bowers and other Netroots notables have pointed this out, and taken upon themselves the mission of saving the Democratic party from its aristocrats. Mr. Danziger wrote the appropriate critique before I could:

You're looking in the wrong place because you're arrogant jerks (hey, I read all your stuff - trust me, you're arrogant jerks) and instead of looking out your window at the American people and thinking about their dreams and hopes and how you can advance them, you persist in looking in the mirror (or looking on your computer screen and reading all the blogs that make you go "Yeah!" (new acronym: BTMYGY!) and believing that Of Course everyone thinks that Catholics are repressive assholes, and Of Course the average Rethuglican is a gender criminal, and Of Course typical Americans who worry about people who cut other people's throats on video on the Internet are bedwetters.

Well, as an arrogant jerk, I can sympathize. What common ground, besides the Porkbusters campaign, has either side of the blogosphere ever offered the other? More specifically, what am I willing to offer?

When I think of something, I'll post it.

[Via Glenn Reynolds.]

Watching the Detectives

2007-06-19T03:31:00.000-04:00

A Pajamas Media article describes the scene in Ramallah, and also the scene captured by the media for its unfortunate viewers:

... the various foreign television reporters positioned themselves in front of the masked gunmen and spoke seriously to the cameras about the rising tension in Ramallah, trying their best to make it sound as if they were in the middle of a war zone. But if their cameramen had panned out for a wider shot they would have shown crowds of mostly young men hanging around, eating snacks, buying cold drinks from vendors, and taking photos with their mobile phones. There was no sense of fear or menace at all. I even saw one photojournalist, who works for an American newspaper, giggling a bit as she aimed her camera at a masked fighter who was posing...

Any of these journalists could have panned away from the terrorists' [that they are presently terrorizing only their own countrymen does not change this fact] photo opportunity. They did not; they served the terrorists at the expense of their own viewers. Thus they honored the de facto bargain long agreed on both sides: terrorists will provide dramatic footage, and in exchange the media will display it with a maximum of drama and a minimum of context, like a star painting hung alone in a gallery.

This is your visual media in action: helping your enemies lie to you.

[Via Glenn Reynolds.]

Redirection

2007-04-05T09:25:00.000-04:00

Most of my future output will be found at

http://www.raw360.com

I will be joining Alex Whitlock, Mike Ahlf and others; I hope to hear from you there.

Update 6 June: Unfortunately, RAW360 is closing. Future posts will again be seen here.

Prospect Theory

2007-03-19T11:36:00.000-04:00

A loyal Marginal Revolution reader asks about prospect theory [an extension of expected utility theory where local utility is based on a perceived expected outcome]. I have never had occasion to apply it. My gut reaction is that it is a tasteful exercise in numerology: people demonstrably do not maximize expected utility, so let's add another unobservable parameter to increase the flexibility of our theory. On the plus side, though, it provides a good ~~explanation~~ parametrization of the very real endowment effect.

Since I am following Mr. Cowen's agenda, let me also follow his example and slip into dispensing advice. To wit, your utility function is probably flatter than you might imagine, and you are better off acting to maximize expected utility even when it seems counterintuitive. In short, don't spend much effort avoiding small risks.

[Mr. Cowen's comments are here.]

Kindness

2007-03-16T09:37:00.000-04:00

Via Q&O, we see some evidence of internal unhappiness with the Iranian regime:

An Iranian MP who supports summoning Iranian President Mahmoud Ahmadinejad for a discussion on his administration’s economic and foreign policy has told the conservative Iranian news agency Aftab that eight more MP signatures are needed.
He said that despite pressure by Ahmadinejad’s supporters, he and his colleagues have succeeded in obtaining signatures from 64 MPs.

This is promising, and Mr. McQuain conjectures that continuing American sanctions will further strengthen these dissidents.

Some few readers may recall that last year I argued in favor of immediate military action against the Iranian regime. This did not occur, and the world has not yet ended; thus I suppose I was in error.

Now consider the possibility that sanctions have, as some suggest, served to keep the Cuban and North Korean regimes in power -- just as Japan's isolation before 1850 preserved the ancient Shogunate. I have discussed before how open trade can be used by oppressive regimes to bribe potential rivals. Is there a middle ground, of trade which is open to Iranians but not completely controlled by their regime, which would permit us to open up the country?

Naturally Iran's rulers will seek to avoid exactly this outcome. In addition, we still wish to reward cooperation rather than intransigence. Thus I propose the following:

Continue the program of sanctions until some sign of progress, however specious, is achieved. Offer to "reward" the Iranians for this, not be completely relaxing sanctions, but by opening up a new "managed trading presence" which would putatively ensure that trading was in some broad spectrum of "approved" goods. In fact, the approved list would be a sham: the point is to create a managed trading presence in such a way that the profits from trade cannot be steered by the regime to its supporters. (It is not at all necessary that America or its allies capture these profits.) This offer would be made in a highly public manner to make it difficult for Iran's rulers to refuse; we would hope then to maintain and increase a presence in this enemy territory.

Perhaps kindness can kill. It's worth a try, though I confess I am happier with carrier groups waiting in the wings.

We'll Fish There

2007-03-15T05:28:00.000-04:00

"Beyond the Zero" is the first two hundred pages of the greatest novel ever written. Alas, Gravity's Rainbow is not that novel. Thomas Pynchon's genius operates only at short wavelengths: half a page can change your heart, but a whole novel is a chaotic heap of glories, like the ruins of Atlantis.

Fluent and brilliant users of language -- Martin Amis, William Gibson, or the incomparable Nabokov -- are praised for their "sparkling" or "crystalline" clarity. This metaphor is deserved, but its implied passivity is also apt. Mr. Pynchon's stroboscopic, obfuscatory, blazing prose is of a different kind.

Here is his description of wartime English carolers, from Gravity's Rainbow:

So this pickup group, these exiles and horny kids, sullen civilians called up in their middle age, men fattening despite their hunger, flatulent because of it, pre-ulcerous, hoarse, runny-nosed, red-eyed, sore-throated, piss-swollen men suffering from acute lower backs and all-day hangovers, wishing death on officers they truly hate, men you have seen on foot and smileless in the cities but forgot, men who don't remember you either, knowing they ought to be grabbing a little sleep, not out here performing for strangers, give you this evensong, climaxing now with its rising fragment of some ancient scale, voices overlapping three- and fourfold, up, echoing, filling the entire hollow of the church -- no counterfeit baby, no announcement of the Kingdom, not even a try at warming or lighting this terrible night, only, damn us, our scruffy obligatory little cry, our maximum reach outward -- praise be to God! -- for you to take back...

Any of Pynchon's novels is filled with smaller-scale creations, overwhelming works that lack even canonical names: the Angel of Lubeck, the Disgusting English Candy Drill, the Lightbulb's Monologue, and innumerably more.

Mr. Pynchon is also an electrical engineer, and scientifically literate. Who else would write an ode to the Poisson distribution:

There do exist levels were chance is hardly recognized at all. But to the likes of employees such as Roger Mexico it is music, not without its majesty, this power series

Ne^-m
æ
è

1+m+
m²
2!

+
m³
3!

+¼+
m^n-1
(n-1)!

ö
ø

,
terms numbered according to rocketfalls per square, the Poisson dispensation ruling not only these annihilations no man can run from, but also cavalry accidents, blood counts, radioactive decay, number of wars per year....

Mr. Pynchon's failure to scale up has two major sources, beyond the inscrutability of his plots. The first is his mythmaker's reliance on suggestion, indirection, and ellipsis, which is effective in any given instance but cumulatively irritating.

The second, and more important, is his and his characters' tendency -- none the weaker for being self-aware -- to paranoia. Paranoia cannot be made plausible, and the novel must remain frustratingly vague or else become risible. The vague "levels" in the passage above show a light touch of this, but it is laid down more and more heavily as Gravity's Rainbow progresses.

In case even that is too subtle, Mr. Pynchon's next novel Vineland is a blunt, ill-tempered, hectoring reprise of the same themes -- though its fleshed-out villian, the overly competent Brock Vond, is the one character worthy of respect in the whole sorry show.

Paranoia is also a distinguishing feature of the earlier novella The Crying of Lot 49. Here it is less of a problem; in fact, it provides the only interest or novelty in a book utterly lacking in competing merits. This is widely assigned to college classes, presumably on account of its brevity. It would be much better to follow Mr. Cowen's suggestion and read the first fifty pages of Gravity's Rainbow; it would even be better to read fifty pages torn out at random.

I have not read Against the Day, and cannot say anything of value about it.

V. is less brilliant, and less incoherent, than Gravity's Rainbow -- but still past the redline in both categories. Mr. Pynchon's vignettes (the Nose Job, MG Love, the Siege Party) are more extended but equally distinctive. These larger building blocks are not arranged into any recognizable overall structure, but the poetic and somewhat melancholy novel is still a wonder to read:

Do they even see the wandering bums,
The boys with no place to go,
Or the drifter who cried for an ugly girl
That he left in Buffalo?
Dead as the leaves on Union Square,
Dead as the graveyard sea,
The eyes of a New York woman
Are never going to cry for me.

Finally, Mason and Dixon takes an energetically anachronistic writing style, applies it to a series of implausible or impossible incidents loosely strung along a flat and unsurprising plot, and somehow emerges as a worthwhile and (a first for Mr. Pynchon) moving tale.

[Mr. Cowen's own reply is here.]

Name That Tune

2007-03-12T10:22:00.000-04:00

In the previous post, I promised a more concrete proposal for improving Africa's fate. To understand this, we consider mounting an active counter-corruption campaign, analogous to the counter-insurgency campaigns now underway in various parts of the world. Let us accept the "oil spot" analogy, i.e., the premise that we should proceed by creating limited areas of good conditions, and then attempt to cause those areas to gradually spread.

There are at least two other options: the present status quo, or a policy of detachment (also known as "Let Africa Sink"). The preponderance of evidence indicates that these are the only other options. Remember that the object is to help Africans, not their nations.

Who will undertake such a counter-corruption operation? No national interests are at stake, except possibly for resource acquisition. This is why China has begun offering friendship to some African governments; but this is also the exception that proves the rule, showing that resource acquisition is more efficiently accomplished through corrupt governments than despite them. Altruism might be a motive, but in the whole course of history altruism has not accomplished anything of this scale; and, as we will shortly see, the process will involve violence or at least the credible threat of violence, which are hard to reconcile with pure altruism. Thus we must posit a counter-corruption campaign propelled by the prospect of profit.

Who will oppose this operation? The obvious answer is: those who profit from the corruption. Since that includes the structures of the presently constituted governments of Africa, up to their highest levels, the "oil spots" cannot be under their control; and they will resist this loss of control (and loss of the spoils a region might otherwise generate). Even neighboring governments will be adversely affected by the example of a more prosperous region, which would increase their own subjects' dissatisfaction. Thus the campaign must of necessity face governmental enemies, which will have the means and the will to forcibly disrupt any progress it shows.

The administration of oil spots thus requires defenses against armed aggression. In addition, it requires a very particular kind of freedom for the residents: their freedoms must be aligned with the incentives that will make them productive members of a productive society. They must be free to own, to work, to learn, and to innovate; and they must not be free to extort bribes, to give patronage, or to evade debts. Their work will be hard and poorly paid, for they are unskilled and remote from the rich world; thus their incentives to dishonesty, reinforced by a lifetime in a dysfunctional society, will be great. The punishments available must therefore be correspondingly great, or the whole counter-corruption strategy will fail. Expulsion from the administered region might be sufficient, but this is not guaranteed.

Thus we will need externally imposed authorities with the powers of government, answerable to no African nation, holding great power over the lives of the native residents, attempting to profit from their labor. Readers will by now have recognized this scheme well enough to call it by its true name: colonialism.

Show Your Tongue

2007-03-09T10:55:00.000-05:00

A loyal MR reader asks about Africa:

What are your long term predictions? Which policies should rich countries adopt? Which will they adopt? What can I do?

As before, let me address the last question first. What you should do depends on whether you wish to help Africans, or to keep their plight in the Western eye. The latter cause is admirably well served by donating to any of the highly advertised charities which claim to be helping Africans; what your money will really be used for is to pay Westerners to persist in informing us of Africa's plight. If this is not what you want, I think the best course is to donate through a long-established and lightly advertised charity; Catholic Relief Services and possibly Christian Children's Fund come to mind. I do not know whether secular equivalents exist.

Rich countries should desist from agricultural subsidies. This is a good idea in all kinds of ways. Obeying the rule, "First, do no harm," we should stop spending money to further immiserate the world's poorest. Note that undermining the livelihood of African farmers inevitably sends them to the already swollen and hellish cities.

This outcome does not seem likely. In America, the Senate (which I generally admire -- the institution, not its members) ensures overrepresentation of rural areas, and this power imbalance enables them to extract subsidies. The case in Europe may be still worse: Spain, in particular, garnishes 8 billion Euros annually from the EU CAP, and any attempt to push them away from the trough could well lead to their abandonment of Europe.

But the biggest problem for Africa is governance. As Tim Harford writes of Cameroon in The Undercover Economist:

The rot starts with government but it afflicts the entire society. There's no point investing in a business because the government will not protect you against thieves. (So, you might as well become a thief.) There's no point in paying your phone bill because nobody can successfully take you to court (so there's no point in being a phone company). There's no point in getting an education because jobs are not handed out on merit (and in any case, you can't borrow money for school fees because the bank cannot collect on the loan, and the government doesn't provide good schools). There's no point setting up an export business because the customs officers will be the ones to benefit (and so there is little trade, and so the customs office is under-funded and looks even harder for bribes).

No amount of aid from individuals or governments can correct this. I will offer a solution, less unsavory than Kim du Toit's, in a future post.

[Mr. Cowen's answers are here.]

Unpleasantries

2007-03-07T09:33:00.000-05:00

Short, unpleasant comments, now at

http://un-pleasantries.blogspot.com

Loose Cannons

2007-03-07T07:56:00.000-05:00

Loyal Marginal Revolution reader Johan Richter asked for:

Your preferred policy towards unions.

I am sympathetic to the idea that the asymmetry of size between a corporation and an individual employee should be redressed somehow. Unions as we have experienced them are a blunt and dangerous instrument with which to attempt this. Unions tend to overstep their ideal role in several ways:

Work rules are clearly wealth-destroying, and tend to outlive their usefulness.

Flying pickets and sympathetic strikes attempt to hold all of society hostage to union demands.

Henry Hazlitt, in Economics in One Lesson, phrased this well:

But the moment workers have to use intimidation or violence to enforce their demands—the moment they use mass picketing to prevent any of the old workers from continuing at their jobs, or to prevent the employer from hiring new permanent workers to take their places—their case becomes suspect. For the pickets are really being used, not primarily against the employer, but against other workers. These other workers are willing to take the jobs that the old employees have vacated, and at the wages that the old employees now reject.

Finally, unions in the public sector often have a too-cozy relationship with the government that is allegedly their employer. Here the issue of protecting workers from rapacious capitalism does not arise; yet, with no moral reason for their existence there, unions are omnipresent in government. Perhaps this is because only government can survive union work rules and constraints without being bankrupted.

Kevin Drum deserved particular opprobrium for his intellectually dishonest treatment of this issue. He is happy to gloss over the fundamentally undemocratic nature of the card check process, even after treating us to this egregious parody of reason:

I figure that if a country guarantees the following three rights, it's probably a pretty decent place:
The right to free speech
The right to a fair trial
The right to vote
.... So here's a question: Do you think convicted felons who have served their time should be prohibited from speaking freely? Do you think they should lose the right to a fair trial?
No? Then why do they lose the right to vote in 20 states?

This is perhaps the most laughable non sequitur I have ever seen in print.

Returning to the original question, my preferred policy would be to permit unionization whenever workers chose it by secret ballot; to protect union organizers from employer retaliation; to forbid government employees from unionizing; and to explicitly state that violence employed in a labor dispute is as criminally culpable as any other violence.

[Mr. Cowen's comments are here.]

Aversion Therapy

2007-03-06T12:07:00.000-05:00

A loyal Marginal Revolution reader asks:

What is currency and what are the potential implications of a completely digital currency that could have unlimited meta information attached to it? [Some obvious implications would be tracking transactions and the government's ability to enforce taxes, etc., some more esoteric stuff would be attaching conditions much like covenants, say that a particular payment could only be used to buy products that were carbon neutral, possibly down the road having policy implications.]

This is a control fantasy. Here is what to do when you are tempted by ideas like this: imagine a team of wealthy, rude, and immensely cheerful investment bankers bantering with the masseuse in First Class on their way to explain to their client how to get around your regulation.

It works for me.

[Mr. Cowen's far more thoughful answer is here.]

Marvels of Automation

2007-03-06T09:14:00.000-05:00

Even this blog is banned in China.

Hypothesis

2007-03-05T11:00:00.000-05:00

Could Al Gore's exorbitant household electricity consumption, the target of so much analysis and satire over the past week, be due to electric vehicles? Recharging must be very energy-intensive, and this would also explain Mr. Gore's reluctance to offer a defense: it would be an embarrassment to the environmental cause to affirm this, if true.

Datum

2007-03-05T10:13:00.000-05:00

A loyal Marginal Revolution reader asks:

What are your thoughts on the new dynamic optimal public finance policy models being built and simulated? Will they yield any new insights applicable for the real world, or are they a fad?

Fortunately for this reader, he did not ask me, since I possess no relevant information. I can, however, offer one true story.

Over the past few years, the UK government has sought to ensure the financial viability of pension funds, partly by imposing "duration matching" restrictions on the bonds held by these funds. The result has been substantially increased demand for long-dated bonds, to the extent that the GBP yield curve is now substantially inverted (as of this writing, 30-year swap yields are over a percent below 2-year).

The UK government, which is forcing pension funds to buy long-dated bonds, could then lower its own cost of funding by issuing more long-dated bonds; but they have not acted to do so. Perhaps in a few years' time that part of the government will notice the shape of the yield curve, and issue long-dated bonds, thus flooding the market and inflicting huge mark-to-market losses on the pension funds.

The point of this little story is that governments cannot be trusted to make even the most obvious decisions. This is not UK-specific: witness then-U.S. Treasury Secretary Lloyd Bentsen's persistent issuance of short-dated bonds before the 1994 rate hikes.

[Mr. Cowen's answer is here.]

Precious

2007-03-05T06:44:00.000-05:00

A loyal Marginal Revolution reader asks for discussion of

china [sic]

I have not been to China since 1999, but I feel confident that the changes since then are the logical extension of those already underway at that time. I agree with the conventional wisdom that China is highly promising but highly unstable; and I think that, for the non-Chinese world, this is a good thing.

To a Western sensibility, China outside Hong Kong feels alien -- more so even than Tokyo. Perhaps I can express it best by saying that the Japanese, while serious and formal, seem young in their curiosity and perfectionism, while the Chinese seem old, old with weariness rather than with wisdom. Life is not precious in China, and death is not dreaded.

The overriding pragmatism of Chinese culture also appears to contribute to a greater vulnerability to tragedies of the commons. To a sufficiently imaginative viewer, almost any public good -- from an open stretch of roadside near a park entrance, to an honestly run business paying no kickbacks -- is a resource crying out to be exploited. The preservation of public goods through forbearance on the part of many is s significant part of "social capital", and there is little such forbearance in China. Perhaps this is an effect of crowding and poverty, rather than of anything specifically Chinese; I have no firsthand knowledge of India or of Africa beyond its northernmost reaches.

China is in a three-way race, where its economic growth must outpace both the aging of its population (projected into the future here) and the social time bomb of its gender imbalance. I expect that continued rapid growth is necessary for stability; stagnation or even slow (1-3% annual) growth will likely lead to unrest, violence and possibly collapse. Looking carefully at the aging chart above, it appears that China's apparent growth is partially due to favorable demographics, as many people enter the work force and few leave. This is reminiscent of Japan's apparent dominance in the 1980's, which was boosted by an extremely similar demographic profile.

Finally, throughout the world, what is precious? Many Americans and Europeans cast a very wide net here, proclaiming the sacred value (though they might not choose that word) of the quality of life of farm animals and lab rats. In China, where exotic animals are jammed into cages outside the more expensive restaurants, such a view seems implausible.

[Mr. Cowen's remarks are here and here.]

Spot the Constraint

2007-03-02T06:14:00.000-05:00

A loyal Marginal Revolution reader asks for discussion of:

... the potential effects of not only making cable tv a la carte, but also requiring that television content providers allow choice in how the consumer pays for the service - either an advertisement based system or a fee that would eliminate the commercials. Additionally, require that the consumers be given a choice of types of advertisements they would be exposed to.

After all, if consumer choice is a good thing, wouldn't a mandatory increase in consumer choice be even better?

Snark aside, let me take these suggestions in reverse order. Giving consumers a choice of types of advertisement is a recipe for chaotic and intrusive intervention, as the definition of "type" is by no means obvious. Immediately obvious consequences include pressure groups seeking to create new types so that people can ask to not see them, and advertisers deliberately seeking to blur the boundary lines in order to minimize the relevance of the restrictions.

Next we come to the much more reasonable suggestion of forcing broadcasters to offer a choice between fee-based and advertising-based funding; for every channel we must also have a "premium" channel offering the same content (plus some filler to make up for all the time saved, I expect) without advertising.

Why doesn't such a thing already exist? The scarcest resource seems to be cable bandwidth, and it seems probably that premium ABC (or other major network) would be a more profitable use of bandwidth than an extra shopping channel. There are two possibilities.

First, perhaps a premium version of a major network would be the most valuable use of bandwidth, and the network operators are suppressing it for nefarious reasons of their own. In this case they could circumvent the proposed rule, for example by pricing the premium channel too high; cable operators would lose capacity and content providers would be unaffected.

Second, perhaps the market's apparent message is correct, and premium channels add so little value that they cannot justify this expense of setting them up. Then this would be just another mildly value-destroying government intervention.

There are two broad points to make. First, broadcast content providers may reasonably be subject to regulation based on their use of a public good (i.e., bandwidth on the relevant delivery mechanism), but regulations which oblige them to consume more of that good are difficult to justify.

Second, returning to my first reaction above, consumer choice generally cannot be manufactured by government regulation. Here the effect of duplicating major channels will be to drive marginal channels out of the spectrum.

[Mr. Cowen's discussion is here.]

Snobbery

2007-03-01T10:08:00.000-05:00

Several loyal Marginal Revolution readers ask for discussion of IQ:

"There is something special about IQ. We must conserve IQ at very high cost, and gains in IQ will bring very high social returns."

Actions to improve average IQ are eugenics, or else they are not meaningful. This conclusion does not require that IQ be entirely, or even majority, genetic in origin. Any measures to improve the non-genetic portion of IQ are ephemeral as they are not propagated across generations, and are also tantamount to expending resources teaching people to take IQ tests. [Cynics will argue that this is what education mainly consists of, but few will argue that it is the best goal for education.]

Here I am ignoring the idea that immigration should be restricted to "conserve IQ". Besides its repugnant nature, this is a very weak argument. You can reach the same conclusions on immigration by arguing for greater social assimilation, and against dilution of America's culture of honesty and opportunity; and these latter arguments have some justification outside mere prejudice.

I also oppose the conflation of IQ with social productivity. Oddly, the two are often merged by self-styled progressives, seeking to minimize the case that poverty is self-inflicted. I have written before about this.

Finally, there is a good case to be made that we should encourage reproduction among the upper classes, if only because demographic decline seems a greater threat than overpopulation. This can only be accomplished by ending the lifelong discrimination against mothers in skilled jobs, which is fantastically expensive in its own right. This spills into an unrelated point, which is that social welfare would be greatly increased by getting as many 20-25 year olds as possible out of college.

[Mr. Cowen's own answer is here.]

Delights

2007-03-01T03:46:00.000-05:00

A loyal Marginal Revolution reader asks for discussion of:

... something I've been thinking about a lot as I pack up my house to move: Why do we buy books and videos? Doesn't it make much more sense to outsource their storage to libraries and video stores or services like Netflix?

This question is only meaningful to city dwellers, or to those with uniformly mainstream tastes in books. Most libraries, even good ones, are thinly stocked; and anything shorter than book length is exceedingly hard to find. For examples, go to your library and try to obtain the following:

a Kingsley Amis book other than Lucky Jim or The Old Devils

the Roger Zelazny novella He Who Shapes

the Richard Connell story "The Most Dangerous Game"

Also, books are not like hamburgers, consumed once and then unneeded. Picking up a familiar book and reading just a couple of pages, to refresh its world in memory, is a valuable pleasure which cannot be obtained without a physical inventory.

The interlocutor's case makes more sense for movies, which are more reliably consumed as units. Even here there are problems, like the mismatch between the Platonic ideal of outsourcing storage and the real nature of Netflix and its competitors, which are likely to make you watch Traffic when you are in the mood for Happy Feet. Udolpho has more, in an uncharacteristically subdued vein, here.

[Mr. Cowen's answer is here.]

Gringos' Fault

2007-02-28T09:56:00.000-05:00

A loyal Marginal Revolution reader asks for discussion of:

Latin American politics. Why do our politicians suck.

Assuming that they do suck -- most of my own information on this point comes from the novels of Mario Vargas Llosa -- the obvious suspect is a culture of unaccountability. In particular, governmental failures of almost any sort can be blamed on American imperialism, which for Latin America is actually a closer and more real memory than the vague "colonial oppression" constructed by Arab societies.

Notice that defining policies in opposition to America is not equivalent to offloading accountability. For example, social welfare policies practiced in (e.g.) France are presented as a conscious alternative to "ruthless Anglo-Saxon capitalism"; but this is an attempt by their architects to claim responsibility for success, not to disclaim failure.

Another relevant point is that, due to the generally more hostile topography of Central and South America, even a nation which looks quite small on the map might be divided into isolated regions. This in turn makes regionalism an attractive strategy for politicians, despite its overall negative effects. In short, many governments are insufficiently federalized for the effective size of their countries.

[Tyler Cowen answers here.]

Fifty

2007-02-28T09:24:00.000-05:00

Tyler Cowen has opened up Marginal Revolution to requests, and then has decided to satisfy the first fifty -- perhaps, to him, this seems moderate. Mr. Cowen also says:

It would be fun if some other blogger picked up the same topics (though I won't do them in order), if so let us know in the comments.

Well, my bogging pace is rather slower than Mr. Cowen's, but I will give this a try. I will address the topics after Mr. Cowen, but not necessarily in the same order.

Truculence

2007-02-26T09:19:00.000-05:00

I was struck by Kevin Drum's tendentiousness here:

Over at bloggingheads.tv, Mickey Kaus and my boss are talking about whether it should be easier to fire bad teachers. Naturally this turns into an argument about union busting (Mickey's all for it) vs. figuring out a way to work with unions on this (Paul's position).

Note that Mr. Kaus's fairly centrist position is described as "union busting", while Mr. Glastris's doctrinaire adherence to the union line is presented as an honest quest for solutions.

Justification

2007-02-26T06:43:00.000-05:00

Megan McArdle goes badly wrong in attempting to reconcile cultural relativism with her opposition to some forms of barbarity:

That is not to say that these cultural traist should be allowed to continue; I think [female genital mutilation] should be stamped out, because people shouldn't be able to make those kinds of permanent decisions for their children.

[Emphasis mine.] This completely begs the question of what "those kinds" of decisions are. Orthodontic braces, for example, are a permanent decision which I presume does not require stamping out.

This is not about choice, but about a culture of subjugation supported by barbaric cruelty. Miss McArdle has clumsily tried to bury this point, but it cannot be avoided.

Relative Value

2007-02-21T12:10:00.000-05:00

Poor Value: paying 99 cents (79p in the UK) for the Meat Puppets' hilarious "Foreign Lawns", whose duration is 38 seconds.

Good Value: listening to the 30-second excerpt provided for free on iTunes or on Last fm.

Backwardness

2007-02-20T11:44:00.000-05:00

Related to the previous post, some thoughts on discrimination and free riding at Chequer-Board.

Expectations Redux

2007-02-20T10:44:00.000-05:00

I re-examined another set of old posts, in the light of this interesting tidbit from David Balan:

4. Bryan Caplan suggests that statistical discrimination is at least mitigated, and possibly eliminated, by the fact that high-attribute individuals in groups with low average attributes have an incentive to "counter-signal" by taking some action to show that they are in fact high attribute. It is true that the possibility of counter-signalling will mitigate the harm from statistical discrimination, but I don't see how it can ever make it go away.

For example, the ill effects of prevalent low-level racism could conceivably be mitigated by a positive consequence, namely that individual blacks might have additional incentives to accomplish something excellent and thereby distinguish themselves from the (statistically undesirable) run of the mill.

Two years ago I wrote:

... people are not so easily fooled. One of the highest hurdles for a black man or woman to overcome, when entering the workplace, is the widely held suspicion that perhaps he has been the beneficiary of placement beyond his qualifications. This prejudice is going to be even harder to eradicate than the racism of fifty years ago, because it has an ineluctable truth behind it -- and even if that cause is removed, the suspicion will taint every potential past beneficiary for a generation. The government lacks the power to make people ignore this -- it is swimming upstream, and the current does not slacken.
Such is the lasting legacy of affirmative action.

I think these words are directly relevant to Mr. Balan's point; the presence of affirmative action programs defeats the productive counter-signalling for which Mr. Caplan hopes. In fact, attempts at such signalling are actively undermined, and the signals of accomplishment will be least respected by exactly those -- namely, employers engaged in statistical discrimination -- whose approbation is most needed.

Significance Redux

2007-02-20T03:19:00.000-05:00

Kevin Drum, who should know enough about statistics to know better, has again trotted out the old canard about Democratic Presidents being better for the economy:

As longtime readers know, Democratic administrations routinely deliver better economic performance than Republican administrations. Among other things, they deliver lower inflation, lower unemployment, higher economic growth, better stock market growth, and higher median wage growth. This performance is remarkably robust and consistent...

I thought I had put this thing to bed in 2005:

Several posts lately, notably from Kevin Drum, have purported to show that the American economy prospers more under Democratic Presidents. This conclusion is based on about 50 data points, so we should not expect much significance, but it has been eagerly reported. [...] if Democratic partisans want to use data like these to show that Democratic presidents are somehow better for the economy, they must explain how it is that a Democratic president in the US can help the French and Swedish economies (at least) even more than our own.

Can someone with actual readers please help me slap this thing down?

Chain of Decision

2007-02-13T08:04:00.000-05:00

Regarding the recent fuss surrounding Amanda Marcotte, there is one thing to add. Someone -- not John Edwards -- made the decision to employ Miss Marcotte and Melissa McEwan. That decision has now forced Mr. Edwards to pick sides between Chris Bowers and Bill Donohue, and for no possible gain.

Someone -- possibly Mr. Edwards -- finessed the difficulty as well as possible, easing Ms. Marcotte out without actually firing her. It won't work perfectly, and it may not work at all; it depends on whether Mr. Bowers decides to swallow his pride and accept a defeat (perhaps following Matt Stoller's example and declaring victory), and on whether Mr. Donohue and those whom he represents decide to pursue Miss McEwan as well.

Whoever hired these bloggers in the first place made an obvious and expensive mistake. I expect to see another "resignation" from the Edwards campaign in about a week; not, this time, a blogger.

Update 15 February: the "someone" above turns out to be named Matt Gross. [HT: Q&O.]

What He Said

2007-02-13T06:33:00.000-05:00

Dean Esmay says it succinctly:

I've been saying for years now that I'll compromise with the Global Warming crowd if they'll get over their insane fear of nuclear power (and the dread demonic nuclear waste).

Here is the long version.

Semantics

2007-02-13T05:57:00.000-05:00

In the context of Giuliani's presidential campaign, Ross Douthat discusses what it means to be a "front-runner":

Obviously, it's a bit peculiar to suggest that the person who's leading in the polls isn't, by definition, the person most likely to win - but in a case where two-thirds of GOP voters still don't know where Rudy stands on abortion, and where McCain is still the betting favorite by a substantial margin, I think it's a reasonable suggestion.

Mr. Douthat is too kind. John Podhoretz has characterized Mr. Giuliani as the "front-runner" because of his lead over John McCain in early polls, though he admits they "may be meaningless". But why not, instead of speculating about this uselessness, follow Mr. Douthat's example and look at the market data?

This answers the question. The polling data are available to the market makers, who nevertheless maintain Mr. McCain as the clear favorite. Unlike pundits, the traders have an incentive to be right. Calling Mr. Giuliani the front-runner is simply willful ignorance of obvious data.

Incredible

2007-01-15T03:42:00.000-05:00

The funniest words I've seen this month come from Ann Althouse, who complains of "state and local taxes, like my incredible $12,ooo property tax bill." Sic.

I don't know whether to laugh or cry.

The Case Against Negotiation (II)

2006-12-04T12:37:00.000-05:00

Further thoughts relevant to the previous post, at Chequer-Board.

Enemy of My Enemy

2006-12-04T12:15:00.000-05:00

Options now include providing Sunni military leaders (primarily ex-Baathist members of the former Iraqi officer corps, who make up the backbone of the insurgency) with the same types of assistance — funding, arms and logistical support — that Iran has been giving to Shiite armed groups for years.... Remaining on the sidelines would be unacceptable to Saudi Arabia.

There has been much discussion of the recent Saudi pronouncement on the future of Sunni Iraq, most of it missing the mark. Kevin Drum views it through his usual anti-Bush lenses:

MARCHING ORDERS FROM THE HOUSE OF SAUD....Nawaf Obaid is "an adviser to the Saudi government," but his opinions "are his own and do not reflect official Saudi policy." Roger that. With that boilerplate warning out of the way, Obaid takes to the pages of the Washington Post to warn us in no uncertain terms that if we try to withdraw from Iraq, the Saudi monarchy will make us very, very sorry.
... I wouldn't be surprised if this was the lecture the House of Saud delivered to Dick Cheney after they summoned him to Riyadh last week. Not that Cheney was an unwilling listener or anything. Just one more excuse to stay the course, after all.

Somewhere, the War Nerd is dancing. The Saudis may not have much military expertise, but unless America actively prevents them, they can afford to ensure that Iraq's Sunnis are much better armed than their opponents.

Since Saddam's fall, our strategic enemy in the Middle East has been Iran. Our first tactic, intervening against the Sunni insurgency in an attempt to prevent its interfering with the establishment of civil order in Iraq, was not overtly anti-Iranian. But it failed, or perhaps overshot its goal. We are being forced toward a new tactical struggle against Iran's proxies.

The best outcome for Iran is a Shiite client state in Iraq, with an ongoing American involvement, providing the Iranian government with cover for its own nuclear program (by blowing up whenever it is convenient, to distract attention from possible action against Iran). In passing, it is worth noting that this is why inviting Iran to participate in an Iraqi "peace process" is the worst possible plan: it invites Iranian involvement and gives them this cover as a gift -- and then calls the result a success.

What legitimate objectives can America realistically pursue against Iran? (Not many, as noted here.) Violent overthrow of the ruling regime is presently off the table, and the undisputed lesson of Vietnam is the futility of fighting a war which you cannot bring home to the enemy.

Increased sanctions. The goal of sanctions is often misunderstood. Iran's theocratic rulers nonetheless depend on some degree of support from the mercantile class; by allocating lucrative import licenses, they can reward their supporters and punish their enemies. (Also, a supply of foreign luxuries makes life more pleasant for both merchants and mullahs.) Sanctions aim to disrupt this system, diverting the Iranian government's attention and resources toward the preservation of its own power.

Arming internal enemies. Many Iranians, such as the so-called "students" and the large Azeri minority, are dissatisfied with their government. Increasing their access to weaponry, even if we have no precise control over its destination, will weaken the Iranian regime (though the benefits to America are second-order).

The Saudi threat is partly aimed at us, since the American military's heavy hand has tipped the balance of Iraqi power decisively against the former Sunni rulers; but it is also aimed at Iran. In particular, a diversion of Saudi terror funding from anti-Western irhabists to anti-Persian Arab nationalists would be a real blow to Iran. Since Iran is known to be training, funding and supplying terrorists itself, this would be an unmitigated positive. Let those who are supplying the fuel stand next to the fire for awhile.

Invisible Man

2006-11-23T08:30:00.000-05:00

To begin, consider Robert Caro's descriptions in The Power Broker of the influence of image in reporting, made plain from his examination of the case of Robert Moses. Mr. Moses's often underhanded tactics had been overlooked by the New York press for thirty years, and the falsehoods common in his press releases had been passed unchecked to a public with no way of detecting them. The media's own inertia gave this image a self-perpetuating momentum of its own. Even when scandals broke into the press, the image hampered their investigation:

There had still been many editors and reporters unwilling to face the falseness [sic] of the image they had helped create. There had still been newspapers -- most notably, of course, the Times -- that had shrunk back from the investigations into Title I....
The media's new awareness was particularly significant because it is so strongly influenced by the images that are its own creation. For years, articles about Robert Moses had been researched, written and played in the light of the image of Robert Moses as hero.

[Emphasis mine.] These errors did not arise from any media bias, but from the fact that journalists are a fairly closed group of not very bright people who share many common beliefs. Their preconceptions, which generally agree with those of their associates, are reinforced every time they read the paper. Inconvenient truths are dismissed due to confirmation bias; unexpected facts have a hard time reaching the public.

With this in mind, consider the current press image of Barack Obama. I have no reason to believe ill of him; but I have little information. All I know about Mr. Obama is what I read in the papers; which is to say, all I know is the image. And that is all I will ever know.

The press narrative of Mr. Obama's character is now established. Facts which do not fit will be passed over by researchers, or questioned at every level of the editing process, making them very unlikely to percolate into public view. Instead, we will be given reinforcement of the narrative, presented as "news" just as if it, in fact, contained something new. We will be told nothing, and then reminded how much we have been told.

Eureka

2006-11-23T04:45:00.000-05:00

Kevin Drum discovers the Starship Troopers argument (see these comments), and presents it with his customary clarity.

There is also an interesting turn of phrase in the Lawrence O'Donnell post Mr. Drum debunks:

Just like George Bush, Bill Clinton, and Dick Cheney, we are all combat cowards.

For symmetry, of course, the name of Al Gore should be added to that list. But Mr. Gore's career, unlike Mr. Clinton's, just might not be spent; and Mr. O'Donnell cannot bring himself to criticize a live Democrat.

Duncan Black's commentary on Mr. O'Donnell's post is limited to "heh-indeedy" [sic].

[Cross-posted from Chequer-Board.]

Tautology

2006-11-21T09:38:00.000-05:00

A headline in the San Francisco Chronicle:

Pelosi's all smiles through a rough House transition

This would be news if Mrs. Pelosi's features remained capable of assuming any other expression.

Private Enterprise

2006-11-21T09:35:00.000-05:00

After years of declining standards, government-enforced unselectivity, and determined dumbing down of exams, Britain's independent schools are joining with Cambridge to do something about it:

Eton is among at least 100 leading independent schools to have shown strong interest in the Pre-U. Others include Harrow, Dulwich College, Winchester and Charterhouse.
But there are fears of the creation of a two-tier examination system for rich and poor pupils, with independent schools opting for the Pre-U and state schools remaining with the discredited A-level system.
Graham Able, Master of Dulwich College, who is on a steering group advising on the Pre-U, said the diploma would better prepare pupils for university....
Barnaby Lenon, Head Master of Harrow, said that A levels were flawed because too many pupils got top grades, examiners made too many mistakes when marking and coursework was vulnerable to cheats.

Tuition at English universities, including "Oxbridge" [Oxford and Cambridge, collectively], has historically been free [i.e., paid by the state] for British nationals. The state tuition payments have been set at the same level for all universities. Within the past decade, Oxbridge and other universities with something to sell have been allowed to institute "top-up fees" which are limited by law to 3000 GBP [5700 USD, but with the purchasing power of about 3600] per year. The Government has made clear that fees beyond this will be punished by the withdrawal of the government tuition subsidy. Cambridge, which is at this point financially and academically stronger than Oxford, has debated making the change anyway, but so far has not.

Meanwhile, the government-mandated "A levels" [a set of subject tests, roughly comparable to AP tests, taken by each British student at the end of his pre-university schooling] have been steadily dumbed down, and their utility to the top universities is dwindling. A new best grade, "A*" [the grade A is not to be confused with the A in A-levels], has been instituted, but it has quickly been caught up in the overall grade inflation.

There is an informal Ivy League alphabet: "A is for Average, B is for Bad, ..." In Britain this grade inflation is government-mandated.

[Cross-posted from Chequer-Board.]

The Builder

2006-11-14T12:01:00.000-05:00

Mr. Caro's vast biography, The Power Broker, is subtitled "Robert Moses and the Fall of New York." It casts Mr. Moses's career as an arc away from idealism into corruption; his main part headings show this clearly.

The first part of the book, describing Mr. Moses's college career -- he was a brilliant and omnivorous learner, an idealist almost untouched by practicality, and a terrible poet -- and early work for New York's good government organizations, is listless and manages, I think, to miss a large point. Mr. Caro notes (truthfully, I assume) that Mr. Moses in later life spoke little about his early, idealistically driven, and unsuccessful ventures; but he assumes the older Moses was silent because of the unflattering contrast with his newer, pragmatic (or corrupt) style. It is equally possible, and fits better with what I understand of people, that the older Moses was silent out of embarrassment for his earlier willful ignorance, for his having made unnecessary mistakes due to feckless arrogance and haste.

The next three hundred pages or so ("The Rise to Power" and most of "The Use of Power") are simply gripping. Mr. Moses was rescued from having to work for a living by Governor Al Smith and his political advisor, Belle Moskowitz; he led the rewriting of New York's constitution, which Mr. Smith championed into law; and he found something he wanted to do in the reconstituted government: parks. In the process, he first offended and then accomodated New York's resident powers, the robber barons along Long Island's North Shore. He fought his corner with an incredible variety of (often illegal) tactics, which Mr. Caro manages to describe in detail without losing the drive of his narrative. "After you fought Robert Moses," said opposing attorney and later power broker Kingsland Macy, "fighting anybody else was easy."

Mr. Moses's devotion to Mr. Smith is evoked with poignant descriptions of his tireless maneuvering in support of the latter's doomed attempt at the 1932 Democratic Presidential nomination, and his creation of the Central Park Zoo as a gift to his now-powerless patron (who was given a passkey). Mr. Caro has managed to fuse a variety of sources and firsthand recollections into a clear and compelling narrative.

The turning point of Mr. Moses's career was his creation, using all his bill-drafting skills, of the Triborough Bridge Authority, a brilliant Trojan Horse which created, with the power of the State behind it, a monopoly corporation which the State could not control. "The authority shall have power from time to time to refund any bonds by the issuance of new bonds, whether the bonds to be refunded have or have not matured, and may issue bonds partly to refund bonds then outstanding and partly for any other corporate purpose." This gave the Authority power to roll its debt forward -- thus ensuring that it would not have to cease operation because all bonds had been paid off -- and to use any new money to start new projects. Triborough became immortal.

Mr. Caro makes a case that this change, which gave Mr. Moses power independent of the wishes of the voting public, was a key step on his march into corruption. Some of his evidence is strong; at other times, just when it should be strongest, it is strangely lacking. The key chapter is "One Mile", where Mr. Caro focuses on the decision to build a section of the Cross-Bronx Expressway through the apartments of East Tremont, rather than along the north edge of Crotona Park. He gives a valid description of the terrible plight of those families caught in the path of the demolition; but he also blames the choice of route for degradation of the uncondemned remainder of the neighborhood (which would have been affected regardless of the route) and for landlords' unwillingness to repair and refurbish (largely driven by rent control). Finally, he cannot come up with any satisfactory means for passing judgement on the route, and reverts to circular reasoning: whatever Mr. Moses's motives might have been, he says, the fact that they were Mr. Moses's alone (QED) shows that they cannot have been the result of a good decision-making process (QED).

In "The Loss of Power", Mr. Caro describes Mr. Moses's overthrow by then-Governor Nelson Rockefeller. The Governor is portrayed as a competing visionary, with some suggestion that he saw more clearly the need for public transportation; however, the facts poking up through this veneer seem to show that he was just a wealthier, younger, and less scrupulous power-seeker than Mr. Moses himself. Mr. Rockefeller did rely on his personal fortune to gain political power; he did install his brother in powerful posts vacated by Mr. Moses; and he did overspend the state budget and then overspend the bonds issued to cover the deficit. In this and in the acerbic depiction of the ruinous Mayor John Lindsay, Mr. Caro's book foretells the budget crisis which had not, at the time of publication, arrived.

Mr. Moses was overly loyal to his subordinates and delegates, two of whom -- the corrupt financier Mike Shanahan, who largely oversaw Mr. Moses's disastrous involvement with Title I housing projects, and the functionary Stuart "Mustache" Constable, who helped squander his popularity -- were instrumental in the eventual loss of Triborough's protective veneer of fawning media coverage. There is a clear villain in Mr. Caro's book: the New York press, and especially the New York Times, which for decades invested in the narrative of Robert Moses as a fearless and effective champion of the people, and substituted that narrative for any diligence, however minimal, on whatever press releases Mr. Moses sent them. At no point in his rise or fall was any of the press (with the possible exception of the Post) interested in truth or objectivity; they simply switched from one narrative to another. And at no time was the Times interested even in reporting events of interest; it did favors for the friend of its publisher, and later barked from the back of the pack of attackers only to protect its own reputation. Even now this is a chilling reminder of the press's powerful incentives against reporting unexpected truths, favorable or otherwise, about any famous figure.

The Power Broker is huge (1100 pages) and sometimes rambling; but it is all worth reading, and the incredible adventure of Mr. Moses's rise to power is the best biographical narrative I have ever read. It will change the way you think about your workplace, your city, your highways, and especially your newspaper.

Negative-Sum Games

2006-11-08T12:07:00.000-05:00

Burglars obtaining stolen goods must generally sell them for far less than their retail value; most of the victim's loss is transferred to the fence [or pawnbroker] or to the final receiver, while the burglar generally reaps only about 20% [M.A.R. Kleiman's guess; see footnote 4 here].

But this is almost marvellously efficient compared to the efforts of Mel Weiss and William Lerach. Having shaken down American corporations for a total of $45 billion in settlements, mostly under contingency arrangements giving their firm up to 30% of a settlement -- and generally taking much more -- one would expect the firm's leaders to have made billions. Apparently not:

On average, investors recovered only about 15 cents of every lost dollar, while Milberg Weiss routinely pocketed millions. Weiss and Lerach saw their personal takes soar from $3.4 million apiece in 1990 to $16 million in 1995. During the 1990s, both men earned more than $100 million. Bitter executives came to view it all as an extortion racket - they called it getting "Lerached."

It looks like these guys managed to siphon off less than 1% of what they extracted. What were they thinking?

[HT: David Bernstein.]

Domain Specialists

2006-11-01T11:02:00.000-05:00

In the London Times, we find a discussion of UBS's recent trading losses:

[UBS] continued to buy government bonds early in the third quarter on the expectation that the Federal Reserve would carry on raising rates.

In words of one syllable: high rates mean low prices [oops]. A buyer wants price to rise. [In fact, UBS shorted the bonds.]

Presumably journalists of all stripes possess this kind of expertise in their specialties. Just imagine.

Brand Dilution

2006-11-01T06:34:00.000-05:00

How the ACLU threw itself away, at Chequer-Board.

An Oddity

2006-10-24T03:45:00.000-04:00

At the North Country Gazette (the online journal trying to make its very own copyright law), one of the headlines is "Lieberman Widening Lead Over Schiavo's Candidate". [No link; the site does not seem to support them.] The article mentions Schiavo nowhere else. I don't understand this bizarre headline at all.

Mi Casa Es Su Casa (VI)

2006-10-23T11:54:00.000-04:00

Actions speak.

Early adopters:
Dale Franks
Neolibertarian Network
Frank Cagle
Ilya Somin chimes in

Bedfellows (test case: Glenn Reynolds)

2006-10-17T09:35:00.000-04:00

I'm toying with an algorithm to get a flavor of what inputs bloggers are using. Follow each link they provide to a blog post, then go to the previous post (thus testing not what they are linking, which you can see by reading the blog, but who they are reading). Take the longest sentence (excluding quotations) from that previous post. Concatenate a decent sample, say, ten of these.

My first test case, naturally, was "Instapundit" Glenn Reynolds. The result:

Beijing has information on a budding reform movement, one that would replace the personality cult of the "royal family" with an authoritarian but rational government based on post-Communist states in Eastern Europe, especially Romania. But donation rates are far less dismal at the U.S. military base in Landstuhl--and as Americans die on the base from injuries inflicted in Iraq, their organs are ending up in German bodies. But, in reality, today, as his poll numbers keep going south and the country is plunged into the continued politics of polarization, the younger George Bush more accurately parallels Richard Nixon than either Ronald Reagan or his father. Check out my podcast interview with David Zucker and Myrna Sokoloff about their infamous suppressed political ad featuring Kim Jong Il and Madeleine Albright. It is bitterly ironic that instead of building on that momentum by continuing to make his case against Lieberman, Lamont has let himself become enmeshed in the same consultant-driven culture of caution and blandness that has produced a steady stream of modern candidates more worried about stepping on the land mines laid out by their opponents' campaign teams than stepping forward to lead. Most of the time where military action was unquestionably justified, China abstained from a UN vote, or when there is some anti-U.S. support brewing in the UNSC against military action, China joined the crowd. Payne offered no explanation as to why the group didn't apply that standard to Nifong--who, after all, indicated he was "very pleased" to have a citizens' committee co-chair who opposed health care for partners or gays and lesbians on the grounds that all gay and lesbian people get diseases and die young; or opposed adding gays and lesbians to a statewide anti-discrimination statute on the grounds that all gay and lesbian people are cross-dressers. I had a wonderful time yesterday with Mary Katharine Ham, Michelle Malkin, and Kirsten Powers, a pro-life Democrat, Christian, and one of the nicest pundits I’ve ever met. Take a wild guess whom I'm betting on. As the Nuke the Moon™ essay becomes more relevant than ever (does America want to be laughed at or feared like gods?), the Nuke the Moon™ t-shirt has come back into print (its third printing).

This seems oddly, well, balanced.

Minority Views

2006-10-16T09:47:00.000-04:00

Conservative principles to disagree with, at Chequer-Board.

Table Scraps

2006-10-09T10:27:00.000-04:00

Related to my recent post on Sign Error, I have added further thoughts in a separate post at Chequer-Board.

Kinship

2006-10-05T08:59:00.000-04:00

Pejman Yousefzadeh and I are having some disagreement as to the degree, if any, to which big government is a natural ally, rather than a hindrance to big business. The opening sallies are here, attached to Mr. Yousefzadeh's comments on Markos Moulitsas's unlikely new incarnation as a libertarian. Responding to my criticisms, Mr. Yousefzadeh says:

... sadly, big government is never an ally of business -- big or small. No business favors or welcomes the massive amounts of regulation that is brought about thanks to the interventionism of big government.

Well, Timothy Carney would disagree. [Also here.] So would Daniel Gross, writing of old-line companies dumping their underfunded pension obligations onto the government. So would Robert Caro, who described in The Power Broker how Robert Moses enlisted the support of New York's main banks and construction firms for his political aims by overpaying them.

Let me also give an example from my own experience, dealing with the second-worst legislation of the young millenium: Sarbanes-Oxley regulations. These cost my employer a few tens of millions of dollars yearly in direct costs, and perhaps five times that in lost productivity and time wasted in ass-covering. To me, as an employee, they are an unmitigated negative. But my employer is a very large investment bank, and can afford the SOX regulatory costs (especially in the current environment) much better than its smaller competitors might be able to. This helps to preserve the oligopoly power of the top-tier firms; limited competition leads directly to higher profits.

All this illustrates a structural principle: governments do not generally innovate, and they do not change the basket of goods they consume in response to innovation by others. Money raised in taxes and spent on public works is, to a certainty, being transferred to established outlets and paid, in the end, to established companies -- without the need for those companies to innovate.

Sign Error

2006-10-05T08:31:00.000-04:00

Megan McArdle says, aside in a long post on the progress of Marxism,

And richer societies can afford to do more. One of the (to me) more compelling arguments in favour of new welfare programmes is that we are so rich, as a society, that we can afford to waste relatively large sums on government incompetence and deadweight loss in order to produce even small improvements in the lives of the truly unfortunate. And if the number of needy shrinks, we can do more for the ones who remain.

This would be accurate if programs to help the needy did, in fact, shrink the number of needy. But with any program we currently know how to design, this is not likely to be the case:

The more dysfunctional a family unit (usually a single, unwed mother and her various children) the more caregiving it is qualified to receive. On top of that the dominant theory in "social services" is the preservation of this family unit guaranteeing that the children are exposed to the dysfunctional values of the mother. [...] The sons thus frequently grow up as petty criminals when young and violent criminals when older. The daughters find themselves pregnant long before completing school and the entire process starts over again having replicated itself with the help of "benevolent" handouts.

Theodore Dalrymple has written most compellingly on this; start here.

[Update 9 August: see also Table Scraps.]

Best Comments Section

2006-10-02T12:49:00.000-04:00

Stephen Bainbridge posts on the media's somewhat skewed follow-up of the HP leak investigation, and who should show up in comments but [apparently] George Keyworth's attorney.

I love the internet.

Dispatches from Afar

2006-09-25T06:53:00.000-04:00

I want to focus on a side comment in this post from Gregory Djerejian:

Unlike Vietnam then, where the domino theory proved a chimerical fear, an American departure from an Iraq still unsettled and cascading into potentially greater chaos could serve to further radicalize the region...

[Emphasis mine.]

I'm not convinced this is the right lesson. Two of the three nonaligned adjacent nations (Cambodia and Laos) did indeed fall to Communist dictatorships, with terrible consequences. It would be more accurate to say that our defense against a domino scenario fell back to a prepared position, off the shores of Thailand, which had been strengthened by our long involvement in Vietnam. [Something like this.]

Where is our second line of defense in the current struggle?

Sigh

2006-09-21T03:31:00.001-04:00

It makes me tired just thinking about Bill "Spike" Lockyer trying to invent grounds for another suit based on the horrible fact that companies sell products which people want. Can you just reread Tobacco Trust Treaty?

Mi Casa Es Su Casa (V)

2006-09-19T11:52:00.000-04:00

The Volokh Conspiracy's Ilya Somin chimes in:

With a Democratic House and GOP Senate (the likely result of this fall's election), the Republicans will get a well-deserved spanking, while the Democrats will be unable to enact the more dangerous parts of their own agenda. Also, a Democratic House would not be able to block Bush's judicial appointments, to my mind a rare bright spot in this administration.

On the other hand, Mickey Kaus and Chequer-Board commenter chsw point out that the Democrats may have the own path to the Grail of permanent majority:

Ponnuru must be willfully ignoring one conspicuous policy initiative that has already passed the Senate, been embraced by the President, and awaits only approval from a Democrat-led House to be signed into law. It wouldn't matter so much if this law, by establishing the principle of a "path to citizenship" for anyone who sneaks into the country to work, wouldn't run the risk of irrevocably changing the nature of the Republic, including the composition of future electorates that would decide whether to repeal it. But it would....

We deport, you reside!

Early adopters:
Dale Franks
Neolibertarian Network
Frank Cagle

Spiked

2006-09-15T11:30:00.000-04:00

Since the Good Little Capitalists have long since fatally mislaid my copy of The October Country, I was momentarily pleased to discover the new collection Bradbury Stories, containing "100 of his most celebrated tales."

Then, through the enlightened self-interest of Amazon.com, I viewed the table of contents. Amazingly, not just a few but all of what I would consider Bradbury's truly great stories have been omitted. "The Long Rain" is not there; nor "The Small Assassin" or "The Jar" or "Touched with Fire"; nor even the more famous "The Veldt" and "There Will Come Soft Rains". It was as if a malicious anthologist had deliberately cut them from an otherwise comprehensive collection.

I searched for the perpetrator, of course -- such a failure should be traced to its source. On the inside dust jacket, I found that

The one hundred stories in this volume were chosen by Bradbury himself...

Siren Song

2006-09-13T04:55:00.000-04:00

ShrinkWrapped describes the appeal of modernity:

Look at how this must sound to a young Muslim man:
Come join the modern world! You will lose your privileged position, lose your feelings of superiority over your women and the infidels who are so much more successful than you, and have to give up your belief that your religion is the only possible way to salvation. In return we will give you the crumbs that fall off our table and if you are very lucky, a job at McDonald's or Nike, so you can raise a family of children who will one day soon know more than you, stop listening to you, and will be embarrassed by you.

[Hat tip: Belmont Club.]

The Price of (Others') Freedom

2006-09-08T12:03:00.000-04:00

Plus a Mi Casa Es Su Casa followup, both over at Chequer-Board.

Invective (II)

2006-09-07T11:16:00.000-04:00

[Aargh -- first version eaten by Blogger.]

The James Fallows article I linked last week speaks of the importance of words in the struggle against Islamism:

Jim Guirard, a writer and former Senate staffer, says that America’s response has helped confirm bin Laden’s worldview in an unintended way. The Arabic terms often brought into English to describe Islamic extremists—jihadists or mujahideen for “warriors,” plus the less-frequently used shahiddin for “martyrs”—are, according to Guirard, exactly the terms al-Qaeda would like to see used. Mujahideen essentially means “holy warriors”; the other terms imply righteous struggle in the cause of Islam. The Iraqi clergyman-warlord Muqtada al-Sadr named his paramilitary force the Mahdi Army. To Sunnis and Shiites alike, the Mahdi is the ultimate savior of mankind, equivalent to the Messiah. Branches of Islam disagree about the Mahdi’s exact identity and the timing of his arrival on earth, but each time U.S. officials refer to insurgents of the Mahdi Army, they confer legitimacy on their opponent in all Muslims’ eyes.
With the advice of Islamic scholars and think-tank officials, Guirard has assembled an alternative lexicon he thinks U.S. officials should use in both English and Arabic. These include hirabah (“unholy war”) instead of jihad; irhabists (“terrorists”) instead of jihadists; mufsidoon (“evildoers”) instead of mujahideen; and so on. The long-term effect, he says, would be like labeling certain kinds of battle genocide or war crime rather than plain combat—not decisive, but useful. Conceivably President Bush’s frequent use of evildoers to describe terrorists and insurgents represented a deliberate step in this direction, intended to steer the Arabic translation of his comments toward the derogatory terms.

I agree with the thrust of Mr. Guirard's diagnosis, but his prescription offers substantial room for improvement. I speak no Arabic, but "irhabist" seems closely related to "hirabah", so I will hazard a guess that it translates as something like "unholy warrior", rather than as "terrorist". We do not wish to characterize the enemy as warriors; we should describe them as cowardly false teachers, leading from behind an army of contemptible dupes. This twofold description, distinguishing between the planners and the executors of hirabah, would have the additional advantage of encouraging clearer thinking about exactly who is doing the dying.

For the self-styled Imams and inspirers of hirabah, we need a word like the English "charlatan". For the cannon fodder strapping on their bomb belts, we need a word expressing not just their evil but our contempt; something like the English "goon". We need to attack the enemy's belief that jihad is somehow honorable, and we should start by attacking the idea that its practitioners are warriors, holy or otherwise.