27 February 2011

"Age of Persuasion" and other podcasts

The CBC Radio show "Age of Persuasion" used to only be available as an unofficial, fan-run podcast. I just found out that starting in January they launched an official feed.

The show is about marketing, but is full of interesting stories and anecdotes even if that topic does not interest you.

I just listened to a recent episode ("Speedbumps") and host Terry O'Reilly had a good explanation of Van Halen's infamous "no brown M&Ms contract rider."  Go and listen.

~ ~ ~

Philosophy Bites is old, but new to me.  10-20 minute interviews with philosophers on a wide variety of subjects.  Worth a listen.

~ ~ ~

I have recommended Radiolab before, but their latest [when I drafted this weeks ago] is particularly good.  It is about sense of direction and being lost.  Well, loosely about that.  The story at the end is moving, and I am rarely moved by stories in the loved-one-gets-sick-will-they-recover? genre.

Oceanographers and others like to point out that we know more about the Moon than we do about the oceans which are so close by.  I would add that we know even less about what is inside our own skulls.

~ ~ ~

The most recent [actually this time] History of Rome has some interesting economics, as it deals with Diocletian's economic reforms during the Tetrarchy.

Run away inflation and an obsession with the neatness and order of top-down command-and-control systems made him do all sorts of silly and destructive things.  Unable to trust the money supply, he invented a new unit of universal exchange for tax assessing and collecting purposes so that the worth of any quantity of one good could be converted into some quantity of any other.  But in order for this static system to remain approximately workable he needed to freeze production of everything at then-current levels in every region, so there were orders remarkable similar to Directive 10-289.  No one was allowed to move or to change professions, even inter-generationally, ushering in the era of serfdom.  Throw on top of that the Edict on Maximum Prices, which imposed death penalties for exceeding the price caps, and assorted other dirigiste tomfoolery and you got yourself a lovely mess worthy that Hugo Chavez or Robert Mugabe can only dream of rivaling.

"Everyone has a plan until they get punched in the mouth."

This is almost certainly the smartest thing Mike Tyson has ever said.

I think of this as the Anton Sigur Factor: sooner or later someone will show up who is not playing by the same rules you thought were in effect.

(PS A browser crash resulted in my losing the source of this image, and TinEye is down, so apologies for not knowing who to attribute it to.)

25 February 2011

Wait! One more union thing!

I thought I was finally done with this. Damn it. This is totally unrelated to Wisconsin though.

Yesterday's Freakonomics Radio is about labor relations in the NFL. I could dissect some of the weird statements from both players and owners, but I won't bother. They're both massively powerful and fortunate groups of people who benefit hugely from the favored status the US has given the NFL cartel.  It's interesting, but I can't say I care much how this shakes out.

What I found notable was the subtext throughout the piece that the NFL Players Association is newly and oddly aligned with the AFL-CIO and the broader labor movement. Dubner interviewed AFL-CIO President Rich Trumka about it, who gave a "workers are workers and we're all brothers" sort of solidarity sound bite.*

Of course, he's "Coach Trumka" to me. Or he was when I was in eighth grade and I played football for him. Even back then the NFLPA was closely aligned with the AFL-CIO. I know this because Trumpka took me and a few of the other guys with him to the NFLPA banquet, which the AFL-CIO (or maybe the UMWA) had been given a large-ish block of tickets to.

* Something that I'd like to get to ask Coach Trumka: if NFL players and coal miners are all brother workers who deserve unionized representation, does the same apply to anyone getting a paycheck?  I have friends who bill out for hundreds of dollars an hour for their law or consulting firms, but are still essentially salarymen.  Undoubtably this is less dangerous than being down a mine or on the gridiron, but Karoshi is still a threat.  I'm not trying to be snarky here.  I really want to know if millionaire athletes are counted in the "workers" column of the "workers" and "management" ledger, how where does one draw the distinction between the two camps?

24 February 2011

Wisconsin 4: Links

To finally wrap up all this public unionism talk, here are some relevant links and excerpts, in no particular order and without comment from me.
EconLog | David Henderson | Collective Bargaining "Rights"

Almost everyone on both sides of the debate uses the term "collective bargaining rights" to mean the right of a union to bargain with an employer who must, by law, bargain in good faith. It also includes the right of a union to negotiate even for employees who don't want to be members of the union and don't want to pay dues to the union. So "collective bargaining rights" really mean the power to force others--to pay the dues and/or to join the union and/or to give up their power to negotiate with an employer. So the alleged right is really the "right" to monopolize the supply of labor to an employer. That's a phony right, not a real right. It's really a power.
~ ~ ~
The Spectator | Alex Massie | Unions vs Government: Wisconsin Edition

Most successful politicians blend pragmatism with principle and calculation with instinct. Obama is no exception. Campaign promises from Guantanamo Bay to Wall Street have turned to shibboleths in office. Obama does want, I think, to be seen as a post-partisan President but his definition of post-partisan is, well, partisan. In any case, he wants to define the parameters of all this himself; like most people his idea of bipartisanship requires other people to agree with him. His idea of the centre is not necessarily Clive Crook's idea and anyway part of the game is to try and shift the centre. [...]

But when it comes to this kind of showdown it's not surprising that he dances with the boys that helped bring him to the White House. This isn't shocking.

Meanwhile, since nothing is so solipsistic as a protest march one should not be surprised by the banners and signs in Madison claiming that Governor Walker is a cheesehead Hosni Mubarak and all the rest of it. Needless to say, this is grotesque.
~ ~ ~
The Economic Collapse | Are The Wild Teacher Protests In Wisconsin A Prelude To The Economic Riots That Are Coming To America?

On the one hand it is good to see Americans coming together and standing up for what they believe in, but on the other hand what these teachers are freaking out about shows just how much America has changed. These teachers are not protesting for liberty, freedom or to change the government. Rather, they are protesting because they want things to remain the same. They simply don't want anyone to mess with their pay. Well, the truth is that none of us ever wants to experience a pay cut. It is not a lot of fun. But sadly, states like Wisconsin are so broke that they have to find cuts somewhere. Someone is going to have to make a sacrifice. The teachers in Wisconsin just want to make sure that it is not them.

The rest of the post is a bit (in my view) hyperbolic, but this is an important point. The left and right are equally conservative, they just differ on which realms they wish to resist change.

~ ~ ~
Washington Examiner: Beltway COnfidential | Tim Carney | Paul Krugman epitomizes the current liberal divorce from reality

In his column today, Krugman describes the unions as a "counterweight to the political power of big money."

But the unions are big money. Five of the top ten contributors to congressional and presidential campaigns since 1989 are labor unions according to the Center for Responsive Politics. In the last election, 10 of the top 20 PACs were union PACs.

More importantly, it's not as if Big Labor is balancing out the rest of "big money." Does Krugman know that all of the top ten industries contributing to the 2010 elections gave more money to Democrats than to Republicans? That's right: Lawyers, Health Professionals, Securities & Investment, Real Estate, Insurance, Lobbyists, Pharma, Government Unions, Entertainment, and Electric Utilities all favored Democrats in 2010.
Peter Suderman comments:
In other words, a lot of the “big corporate money” spent on political donations in 2010—the money to which unions are supposedly providing a counterweight—went to the same party that most of the union money went to, and the party whose political machine has helped back the union-led protests.
~ ~ ~
The Atlantic | Megan McArdle | How Powerful Are the Wisconsin Public Unions?

I've seen some version of this argument on half the liberal blogs I read:
Why bust the unions? As I said, it has nothing to do with helping Wisconsin deal with its current fiscal crisis. Nor is it likely to help the state's budget prospects even in the long run: contrary to what you may have heard, public-sector workers in Wisconsin and elsewhere are paid somewhat less than private-sector workers with comparable qualifications, so there's not much room for further pay squeezes. So it's not about the budget; it's about the power
There's just one problem with this: if the union hasn't managed to secure anything in the way of extra wages, benefits, or other concessions for the workers--if it is really true that all these things are close to the minimum required simply to attract workers--then who cares whether the union survives or not? What "power" is being taken away?
NB That "Why bust the unions? ..." quote is also from P.Krug's column.

~ ~ ~
The Atlantic | Megan McArdle | What's at Stake in Wisconsin?

Especially in an environment like this, where taxpayers are under unusual financial pressure at the same time as the claims on the government are especially high, the choice is not between collecting a lot more taxes, or keeping public worker salaries under control. Oh, many states (and certainly the federal government) may need to raise taxes. But they aren't simply going to raise them high enough to cover any amount of spending. Spending cuts are going to have to be made too, which means that every decision not to cut spending in one place is, de facto, a decision to cut it somewhere else.

If you keep the unions happy, the service cuts are probably going to hit the programs and districts that serve the poor, because the poor, unlike the public sector unions, don't vote. So while both parties seem to think that they're fighting their usual war over the size of government, this is actually a distributional argument--and oddly, what we think of as the usual party positions are reversed. This time, it is Democrats who are fighting for middle class benefits that will probably come at the expense of the poor.
~ ~ ~

What the public worker and pulbic unionized worker wage premium is is a very messy topic, about which I think we would be wise to maintain some intellectual humility.

See Jim Manzi, Tyler Cowen.

~ ~ ~
Reason: Hit & Run | Nick Gillespie | Are Public School Teachers Overpaid or Are Private School Teachers Underpaid?

There's no question that it's difficult (though not impossible) to do straight-up apples-to-apples compensation comparisons between the 9 percent or so of public-sector workers and the 91 percent of private-sector drones.

But when it comes to paying K-12 teachers, the issue at the heart of Wisconsin's recent protests and a bunch about to erupt all over the country, that comparison is relatively straightforward because there are private- and public-sector teachers who do the same basic task.

So what gives when you look at public-school and private-school teachers? The National Center for Education Statistics puts it this way: Using 2007-2008 data (the latest available), the average "total school-year and summer earned income" for public school teachers was $53,230 . The equivalent for private-school teachers was $39,690.

That's a whopping $13,540 differential on salary alone.
~ ~ ~
The Atlantic | Megan McArdle | The Best Things in Workplaces Aren't Free

The comment threads on Wisconsin are filled with union supporters making some version of the argument that this fight isn't about money because unions have already made wage concessions; rather, the fight is about "power" or some similarly non-monetary issue because what the workers really want is to be able to collectively bargain
  • Pension benefits
  • Health care
  • Grievance procedures
  • Work rules
  • Tenure
  • Sick days and vacation
The people making this argument seem oblivious to the fact that all these things cost employers money. I think they understand that pensions and health care are expensive, but they seem to view the last four as freebies.
The final paragraph also deals with another difference between public sector unions and some private sector ones: the former do not have multi-employer compensation plans as some of the latter do. A minor but not negligible distinction.

~ ~ ~
Coyote Blog | Warren Meyer | Public Employee Compensation Packages

For those who really believe state workers in Wisconsin are underpaid, I would ask this question: Which of you business people out there would hire the average Wisconsin state worker for their current salary, benefits package, lifetime employment, work rules, grievance process, etc? If they are so underpaid, I would assume they would get snapped up, right?
~ ~ ~

Generally anti-union guys like me tend to discount the good that trade unionism did do in the 20th century. It's something we should be on guard against. But the flip side of that is true as well: it behooves unions supporters to acknowledge all the progress and justice they've impeded as well.

Adam Ozimek offers two current examples, charter school caps and opposition to removing the employer health care deduction.

~ ~ ~
The Economist: Democracy in America | W.W. | Public-sector unions and fiscal exploitation

While the liberal-democratic state has proven better than the known alternatives, it creates a number of serious problems on the way to solving others. Among the greatest of these problems is maintaining a system of public finance that does not stray outside the bounds of liberal legitimacy. The power to tax and spend is necessary for the performance of the democratic state's legitimate functions, but it is also a ready tool of exploitation and distributive injustice. An ideally legitimate state does nothing people can do better on voluntary terms, and it takes no more from people in taxes than is necessary to finance necessary public goods. But this is a moral target we never hit because the strategic logic of redistributive democracy reliably errs in the direction of expansion of services, deficit spending, and the abuse of taxpayers and other not-very-organised constituencies at the hands of highly-organised special interests. If we are concerned to minimise exploitation—if we care about the extent to which state violence is public-spirited and not merely criminal—we must go out of our way to acknowledge and guard against the abuses of fiscal democracy.

It is in the context of these concerns that we must consider the function of public-sector unions. If they do anything at all, it is to protect their members' claims on future government revenue from democratic discretion—to limit the power of the elected representatives of the democratic public to set the terms on which union-members will receive transfers from taxpayers. That these transfers come to workers in the form of compensation for services rendered the government seems to confuse a lot people. This is, I think, why people on both sides of the debate are distracted by the question of whether government workers are or are not "overpaid". To my mind, the real question is whether government workers should be granted special legal powers that (a) are unavailable to other groups whose welfare also turns on transfers from the treasury, or on the size of compulsory transfers from their bank accounts to the treasury, and (b) limit democratic sovereignty over the distribution of the burdens and benefits of the system of public finance.
~ ~ ~
The Economist: Democracy in America | W.W. | Libertarian unionism

I'VE repeatedly argued that private- and public-sector unions operate in different institutional settings, raise fundamentally different moral and political questions, and that it is altogether reasonable to support private-sector unions while rejecting public-sector unions on account of the nature of their differences. A common response I've heard from the left is that I'm slyly seeking to sow discord by disingenuously arguing that the larger union movement is not in fact one, but is instead a coalition of fundamentally distinct organisations of unequal moral standing. A common response I've heard from the right is basically the same: "you don't really support private-sector unionism, do you"?

Well, I do. Sort of. It's complicated because American labour law is complicated.

The right of workers to band together to improve their bargaining position relative to employers is a straightforward implication of freedom of association, and the sort of voluntary association that results is the beating heart of the classical liberal vision of civil society. I unreservedly endorse what I'll call the "unionism of free association". My difficulty in coming out wholeheartedly for private-sector unions as they now exist is that they are, by and large, creatures of objectionable statutes which have badly warped the labour-capital power dynamic that would exist under the unionism of free association.
~ ~ ~
Reason: Hit & Run | Damon Root | Whitewashing the History of Organized Labor

As scholars ranging from the liberal political scientist Ira Katznelson to the libertarian legal historian David Bernstein have now documented, organized labor’s rise to power typically came at the expense of black workers. Consider collective bargaining, the legal arrangement whereby a union selected by a majority of employees receives the monopoly bargaining power to exclusively represent all employees. This valuable union tool first became part of federal law under section 7A of the National Industrial Recovery Act of 1933. Since blacks were barred from the vast majority of unions at that time, collective bargaining served as a de facto ban on all black workers in unionized shops.
~ ~ ~
Tomhall.com | Jonah Goldberg | Public Unions Must Go

A crucial distinction has been lost in the debate over Walker's proposals: Government unions are not the same thing as private-sector unions.

Traditional, private-sector unions were born out of an often-bloody adversarial relationship between labor and management. It's been said that during World War I, U.S. soldiers had better odds of surviving on the front lines than miners did in West Virginia coal mines. [...]

Government unions have no such narrative on their side. Do you recall the Great DMV cave-in of 1959? How about the travails of second-grade teachers recounted in Upton Sinclair's famous schoolhouse sequel to "The Jungle"? No? Don't feel bad, because no such horror stories exist.

Government workers were making good salaries in 1962 when President Kennedy lifted, by executive order (so much for democracy), the federal ban on government unions. Civil service regulations and similar laws had guaranteed good working conditions for generations.

The argument for public unionization wasn't moral, economic or intellectual. It was rankly political.
~ ~ ~

Both of these posts from The Economist's Free Exchange columnist are nuanced. He has some thoughts on both the pro- and anti-public sector unions side.

"Are public sector unions different?"
"The worst solution except for all the others?"

~ ~ ~

I linked this earlier but didn't excerpt, so here it is again:
Reason: Hit & Run | Peter Suderman | The Difference Between Private and Public Sector Unions

If private sector unions negotiate deals that make their respective industries more expensive to operate, and thus their products more expensive, consumers have the right to buy less, or to go elsewhere to get what they want. Businesses can send fewer employees to Las Vegas conferences. Families can pinch their food budgets if labor costs at grocery stores make prices more expensive, or replace their cars less often if union benefits add too much to the price of an automobile. If too many people opt out, or buy too little, the company in question goes out of business. And unless the government offers a bailout, that’s the end of the story. When dealing with the private sector, unions generally have some incentive not to overreach to the point where their employer goes out of business.

The story’s not the same in the public sector. When government employees negotiate added salary and benefits, those who are not directly employed by the government—which is to say, the vast majority of taxpayers—can’t really opt out. So one of three things has to happen: 1) Taxes are raised to pay for the added compensation costs. 2) Services are cut in order to pay for the additional compensation. 3) The additional compensation isn’t ever paid—a situation that usually comes with, at minimum some sort of minor political drama, if not a serious showdown.
~ ~ ~

The Economist had good coverage of public sector unions back in January, pre-Wisconsin. There are too many points in that article to be able to quote.

Here is their editorial:
The Economist: Leaders | The Public Sector Unions: The battle ahead

“Industrial relations” are back at the heart of politics—not as an old-fashioned clash between capital and labour, fought out so brutally in the Thatcherite 1980s, but as one between taxpayers and what William Cobbett, one of the great British liberals, used to refer to as “tax eaters”. People in the private sector are only just beginning to understand how much of a banquet public-sector unions have been having at everybody else’s expense (see article). In many rich countries wages are on average higher in the state sector, pensions hugely better and jobs far more secure. Even if many individual state workers do magnificent jobs, their unions have blocked reform at every turn. In both America and Europe it is almost as hard to reward an outstanding teacher as it is to sack a useless one.

While union membership has collapsed in the private sector over the past 30 years (from 44% of the workforce to 15% in Britain and from 33% to 15% in America), it has remained buoyant in the public sector. In Britain over half the workers are unionised. In America the figure is now 36% (compared with just 11% in 1960). In much of continental Europe most civil servants belong to unions, albeit ones that straddle the private sector as well. And in public services union power is magnified not just by strikers’ ability to shut down monopolies that everyone needs without seeing their employer go bust, but also by their political clout over those employers.

Many Western centre-left parties are union-backed. Britain’s Labour Party gets 80% of its funding from public-sector unions (which also, in effect, chose its new leader). Spain’s sluggish state reform may be partly explained by its prime minister’s union membership. In America teachers alone accounted for a tenth of the delegates to the Democratic convention in 2008. And the unions are more savvy: this time, the defenders of vested interests are not brawny miners spouting Trotsky, but nice middle-class women, often hiding behind useful-sounding groups like the National Education Association (American teachers) or the British Medical Association.
They also had a good discussion of this in one of their podcasts:

~ ~ ~

WSJ | James Taranto | The Means of Coercion: The privileged are revolting in Wisconsin

Here is the contradiction of progressivism. Progressives tell us they want the government to do more. But they can’t win elections without public-sector unions. Because they are beholden to those unions, their main priority when in power is to increase the cost, not the scope, of government. Because resources are finite, the result is the worst of both worlds: a government that taxes more without doing more. This is unsustainable economically. Fortunately, as Wisconsin voters showed last November, it’s unsustainable politically as well.
That hints at what we might call the "liberal case against public sector unionism."


Woot | Jason Toon | Six Brands That Don't Mean What They Used To - Woot

Polaroid, founded 1937

Used to be famous for: the instant-film cameras that revolutionized the American snapshot. When Andre 3000 told us to "shake it like a Polaroid picture," everybody knew what he meant.

But then: when Polaroid ran into financial trouble in the early 2000s, they were gobbled up by notorious brand-name vampires the Petters Group. The new bosses killed the instant-film camera line in 2008 while licensing the Polaroid name to anybody who cared to pay the fee, quality be damned.

But while the instant film has made a comeback thanks to the enthusiasts in the Impossible Project, Petters Group hasn't fared as well. In 2009, founder and CEO Tom Petters was convicted on 20 counts of fraud and money laundering related to a Ponzi scheme involving phony Sam's Club purchase orders. Classy guy.
That's all very interesting.* But what's this?

Yeah, that's Woot selling me a Polaroid camera. "Quality be damned" indeed. I've noticed several other Polaroid-branded cameras since then on Woot.

The thing happened to treat me pretty well. It took poor pictures in low light, but other than that it was a decent little point-and-shoot.  I got three years of faithful service out of it until I dropped it on the dance floor at a wedding. (Ironically I dropped it while attempting to get my hand through the wrist strap so that I wouldn't drop it.)

It's still a little presumptuous of Woot to curse Polaroid for their vampirism while not shying away from selling Polaroid products.

(* Snark aside, Woot's post actually is interesting.)

Edited to add [9 March '11] — another Polaroid-branded camera from Woot today. Wait, make that two more Polaroids.

23 February 2011

Wisconsin 3: On Public Sector Trade Unionism

I said in my previous post that the end of public sector trade unions was not the bottom of a slippery slope from my perspective, but an intended, explicitly desired outcome.

That's a claim worth backing up with reasoning.

Before I begin though, I want to say that this is something I've changed my mind about in the last couple of years. I used to support public sector unions. My thinking is that since it is illegal for a private sector employer to refuse to bargain with a union it is unseemly that governments, in their capacity as rule-makers, would exempt themselves, in their capacity as employers, from the same requirements. As I look back now, my reasoning was less about allowing public employees to bargain collectively, and more about subjecting public employers to collective bargaining.

As I said though, I have changed my mind. I was not right to lightly equate public and private sector trade unionism. Here's why.

1. The theory of trade unions, as I understand it, is to secure a bigger slice of the profits for workers. That's unobjectionable.

But there are no profits to divvy up in the public sector. The only thing to divide up is tax revenue, and tax payers don't get a seat at this bargaining table. (Well, they do have some power, but only about as much as an individual worker bargaining alone might be said to have. They must act alone, hoping the desired outcome emerges, without the ability to represent the collective interest of the group.)

2. Unions are extremely influential in politics, more so than corporations even, especially at the local level where the big battles over unionism are being fought. I am not exaggerating when I say that not a single person can be elected to my county government without union backing, especially that of the teachers and school administrators. Unions are, because of this, negotiating against people who are beholden to them.

3. I am fond of this quote from Bastiat and have blogged it before.
Socialism, like the ancient ideas from which it springs, confuses the distinction between government and society. As a result of this, every time we object to a thing being done by government, the socialists conclude that we object to its being done at all.

We disapprove of state education. Then the socialists say that we are opposed to any education. We object to a state religion. Then the socialists say that we want no religion at all. We object to a state-enforced equality. Then they say that we are against equality. And so on, and so on. It is as if the socialists were to accuse us of not wanting persons to eat because we do not want the state to raise grain.
Public sector unions have an inbuilt advantage which I find destabilizing. A trade union, like all organizations, serves its own needs as an entity first, and only then the needs of its members. Coming in line far behind this is the ideals the union claims it serves, such as "Justice" or "Health".

Public sector unions get to hide behind their ideals to a huge degree, and much more so than their private sector counterparts. If you push back against the teachers' unions, you get accused of hating education and wanting children to remain ignorant. If you push back against cops, you must be on the side of criminals.

I had to be very careful in point #2 not to use the term "education unions." This is the framing they want, because it presupposes they serve the platonic ideal of Education, when in reality they serve their leadership and their members (in that order).

Trade unionism, I'm told, is all about balancing of power. The ability to hide behind lofty sounding ideals is destabilizing and unbalancing.

4a. (This applies to trade unions private and public.) We all understand why a monopoly provider of a good is bad. Why would a monopoly provider of a class of labor be any better?

4b. This is especially problematic when the monopoly supplier of labor is dealing with a monopsony consumer of that labor, which is what we get with governments.

If unions negotiate higher compensation then their private sector employers pass this on to their customers, who have the option of side-stepping the rising costs by doing business elsewhere if they choose. The public sector has no "customers" — we're all stuck with the deal the government strikes.

(Peter Suderman made this point better than I just did earlier today.)

If private trade unions press their employers too hard they will eventually get push back from the market when their employer loses revenue. Sooner or later other companies, foreign or domestic, whose employees haven't over-reached will make both management and workers suffer. There's an automatic dampening of unions which grasp too much. It's not often a smooth dampening, to be sure, but at least their is some corrective feedback.

There is no such feedback in the public sector. The union can demand more until the fiscal plane finally flies into the mountain, which is what we're getting now, and it's not good for anyone in the equation.

5. Managers of corporations are often accused of being harmfully short-sited: nothing past the next earnings report matters. I think this case is vastly over-egged, but there is a kernel of truth to it.

What is less often said is that government managers are just as guilty of this, if not more so. Nothing matters past the next election.

This is a problem generally, for instance in the building but not the maintenance of new physical plant, but it has proven to be especially a problem when it comes to public sector unions. Politicians have been able to buy electoral and monetary support now while making promises about payments in the future, typically in the form of unfunded medical and pension costs. And because governments have exempted themselves from having to carry these obligations on their books in the same way other employers do, this combo of short-sited management and unions is especially toxic.

6. The major motivation of a private business is to raise the most revenue possible from the least costs. Unions can push against that in the private sector.

A major motivation of government (actually the major motivation, according to some) is to transfer small amounts of resources from a great many people to a fewer number of favored people. Rather than damping that tendency, public sector unions amplify it.

7. We expect corporations to be amoral. Some would say avaricious, but I'll settle for amoral. Unions can push back against that tendency as well. (In theory, at least.)

But we expect better from government. If a union is necessary to keep the government from exploiting workers, why would we possibly trust that government with, say, crafting occupational safety legislation? Or eminent domain power? Why trust them with anything of consequence?

I'm generally someone who expects the government to screw people left and right, so this could conceivably be an argument in favor of public unions. I think in combination with #6 it no longer is. However, it seems like anyone who thinks a union is a vital check on the predations of government-as-employer would have very little faith in government-as-rule-maker's ability to treat anyone else in society with justice.

If teachers and cops and air traffic controllers are powerless to defend themselves from the State without the protection of vigorous trade unions, what's going to happen to me — an individual citizen? Why is it that the people who most vocally claim that the government can not be trusted to set compensation or working conditions for bus drivers, DMV workers, and letter carriers are also the most vocally supportive of empowering the government to set prices for health care, housing, electricity, fuel, vehicles, corn, raisins, sugar, cotton, mohair, organs, low-wage labor, and so on?

I wasn't wrong so much as I was ahead of the times.

According to Eric Holder anyway.

Last year I wrote this in regards to US v Stephens:
(2) Maybe somebody can fill me in here, because I get the feeling I don't have the background knowledge to understand this,* but why are there so many cases of administration n continuing to press the arguments of administration n-1? Because these sorts of decisions are made by courts so slowly I feel like I read an awful lot of "the Clinton DOJ argued X, which was continued by the Bush DOJ" or in this case Obama is continuing down the road that Bush put him on.

Is it a sort of gentlemen's agreement that the new Solicitor General won't abandon lines of reasoning laid out by their predecessor, perhaps in the name of continuity? Is it that these cases are about defending government power and administrations of all ideologies have an interest in doing that? Is it a procedural thing? Once a party, such as the entire United states, has made it's case it can't tack in a different direction?

Maybe there are lots of cases where DOJ n+1 does drop an argument but I don't here about those. It just seems to me like I ought to be reading about more appeals in which the Solicitor says "no, we forsake the position of our predecessors, they were mistaken."
It turns out that I resoundingly did not have the proper knowledge about this, and Patrick filled me in in the comments:
DOJ is required to defend the constitutionality of any act of Congress. There may have been a case or two recently in which the Solicitor General equivocated in defending a law that was problematic, but it's almost unheard of. That's why the Obama DOJ defended this law as aggressively as the Bush DOJ. It's their job.
That settled that.

Until this happened:
National Journal | Marc Ambinder | Obama Won't Go to Court Over Defense of Marriage Act

President Obama now believes that the Defense of Marriage Act is unconstitutional and will no longer defend the 15-year-old law in federal court, the Justice Department announced today. [...]

In a statement, Attorney General Eric Holder said, “After careful consideration, including a review of my recommendation, the president has concluded that, given a number of factors, including a documented history of discrimination, classifications based on sexual orientation should be subject to a more heightened standard of scrutiny.”

This means that the administration will withdraw its defense of ongoing suits in two federal Appeals Courts and will leave it to Congress to defend the law, known as DOMA, against those challenges. It will remain a party to the lawsuits as the law itself remains in effect.

DOMA, signed by President Clinton in 1996, allows states not to recognize same-sex marriages preformed in other states and provides a federal definition for “marriage” that excludes same-sex couples.
Orin Kerr comments:
The Volokh Conspiracy | Orin Kerr | The Executive Power Grab in the Decision Not to Defend DOMA

If you look at AG Holder’s reasons for why DOJ won’t defend DOMA, it is premised on DOJ’s adoption of a contested theory of the constitutionality of laws regulating gay rights. The letter says that “the President and [the Attorney General] have concluded that classifications based on sexual orientation warrant heightened scrutiny and that, as applied to same-sex couples legally married under state law then, from that perspective, there is no reasonable defense of DOMA.” This theory is not compelled by caselaw. Rather, it’s a possible result, one that is popular in some circles and not in others but that courts have not weighed in on much yet.

By taking that position, the Obama Administration has moved the goalposts of the usual role of the Executive branch in defending statutes. Instead of requiring DOJ to defend the constitutionality of all federal statutes if it has a reasonable basis to do so, the new approach invests within DOJ a power to conduct an independent constitutional review of the issues, to decide the main issues in the case — in this case, the degree of scrutiny for gay rights issues — and then, upon deciding the main issue, to decide if there is a reasonable basis for arguing the other side. If you take that view, the Executive Branch essentially has the power to decide what legislation it will defend based on whatever views of the Constitution are popular or associated with that Administration. It changes the role of the Executive branch in defending litigation from the traditional dutiful servant of Congress to major institutional player with a great deal of discretion.

If that approach becomes widely adopted, then it would seem to bring a considerable power shift to the Executive Branch. Here’s what I fear will happen. If Congress passes legislation on a largely party-line vote, the losing side just has to fashion some constitutional theories for why the legislation is unconstitutional and then wait for its side to win the Presidency. As soon as its side wins the Presidency, activists on its side can file constitutional challenges based on the theories; the Executive branch can adopt the theories and conclude that, based on the theories, the legislation is unconstitutional; and then the challenges to the legislation will go undefended. Winning the Presidency will come with a great deal of power to decide what legislation to defend, increasing Executive branch power at the expense of Congress’s power. Again, it will be a power grab disguised as academic constitutional interpretation.
I agree that it would be pretty destabilizing to have any existing legislation existing only at the discretion of the President. No regime certainty there.

But on the other hand, if the executive is going to get a new power at least this is a power to strike legislation off the books. There are worse things we've let presidents start doing.

Wisconsin 2: Some Follow-Up

I got a good comment on my initial Wisconsin post from faithful reader Jim, and I want to respond since I don't think I expressed myself well, out of crankiness and haste. I'll take his points out of order.

We start with:
You don't like Teachers and other public sector unions; I feel fairly agnostic on them, but people in those unions are very much in favor of them. So much in favor of them that people unaffected by the wage and pension cuts are out in support of those that are because of the principle of the thing.
Well, sure. There are going to be people out in support of any concentrated-benefits-and-diffuse-costs policy. Some of them aren't going to have a personal stake in the outcome but feel strongly anyway, partially from (admirable) idealism, and partially as a result of the seen vs. the unseen.
Discounting the opinions of ~20k folks and telling them to go home, while saying of them that they are undemocratic because they are delaying (not stopping) a vote has its own irony. Public demonstration is a stock event in democracies. Public outcries are how The People make their opinion heard when their reps (who you routinely mention you despise) aren't doing their jobs correctly.
I don't think the public employees are being particularly wicked in advocating for their own cause. (Except the teachers who've come down with their own version of the "Blue Flu" — that's shameful behavior, especially from a group who as a rule misses no opportunity to remind everyone how selflessly dedicated they are to children and high ideals.) I merely think they're behaving like any other interest group, and are driven by the same mix of ideology and rapaciousness as all the rest.

It's wrapping themselves in the banners — literally! — of freedom fighters and revolutionaries that is galling to me, not their goals themselves. I'm not contending they're especially anti-democratic, but they sure aren't saints or freedom fighters either. They aren't overthrowing a dictator here, they're just playing the same old down-in-the-mud sausage making games.  I don't want to entirely discount their opinions.  I just want them to stop pretending this is anything other than them angling for a bigger slice of the pie.

(A bigger slice, I'll add, that comes at the expense of taxpayers and also at the expense of other recipients of  Wisconsin programs.  Further, that latter group consists largely of people much poorer and worse off than the trade unionists.)
Now, the fleeing Dem officials? Eh. Shrug...that's just showboating, trying to goad Walker into saying something else they can publicly refute. It's a spectacle. Glad it isn't my elected reps, but probably wouldn't care much if it was. They'll be back, the vote will happen and Walker and his team of Republicans will either consider the importance of these protestors or they won't. But, I know something of Wisconsin and there's more than a handful of Republicans in that crowd.
More than anything I find legislators fleeing the state to be outrageously funny. It's something I would expect to hear about the College of Cardinals doing in the 12th century.

But despite being delightfully colorful, I also find it a bit of dereliction. Principled abstentionism is one thing. (A thing I'm actually quite fond of.) But that's a whole different story. This is refusing to hold a vote you know you're going to lose. Democracies are predicated on the losing side doing so gracefully. Taking your ball and going home is not how these things operate.*

(* I'm a little hesitant to write that, since I'm sure there are issues in which I'd be willing to look the other way if my side was about to lose and threw a massive legislative hissy fit.  Something like the Patriot Act reauthorization.  Nonetheless, that's not how democracy is supposed to work.  Which I suppose is the major downside of voting: 51% of the people gets to tell the other 49% what to do, and the 49% are just expected to shut up and take it. (At least until can convince enough people to make them no longer the minority.)  That's a long way of coming around to the conclusion that we'd be better off with fewer things dependent on government, and thus on voting.  We wouldn't need to be having national such conniptions about the status of public employees if they weren't 17.4% of the US workforce.)

I also find the delaying/stopping of a vote to be a distinction without much difference. If I heard a president say "We're going to delay this election," I wouldn't be very comforted even if he followed up with "but we promise we don't want to cancel it!" That's a Hugo Chavez move. The interstitial of "this is just a delay not a cancelation" is "we're delaying this until we think we can get what we want." And sure, that's depressingly common enough, but it's also putting the cart before the horse, because you're predetermining what the outcome is supposed to be, and then maneuvering around until you can use voting to justify it.
Now, I know this kind of thing grinds your gears but the more important line from the article you linked to is this one:

"Mr. Walker's very modest proposal would take away the ability of most government employees to collectively bargain for benefits."

Ending collective bargaining rights is not a "modest proposal." It is quite obviously the beginning of a none-too-subtle slippery slope that will end the Teachers Union there.
To me this isn't a slippery slope at all, because it's a movement in exactly the right direction. I don't expect Jim or any of the protestors to be comforted by that, but I do think that if that's a goal that many people would consciously like to see happen (including, as a mentioned, the ghost of Hero-to-the-Working-Man FDR) then I don't think "slippery slope" is quite the right way to put it.

(I hope to have an outline of why I dislike public sector unions later today.  Perhaps that will be at least marginally convincing.)

Regardless of that though, collective bargaining is not allowed for employees of half of US states. (26? I don't feel like checking.) I can see not wanting Wisconsin to make it 27 states. But what I don't care for the the apocalyptic way Wisconsin employees are treating this. Not to repeat myself, but it's the tone of these protests that rub me wrong. They want me to believe this is just as big a moral battle as overthrowing a lifelong Middle Eastern dictator, when really the stakes are ... getting treated just like public workers in half of the US.  If people want to aggitate against that outcome, they're more than welcome to. I just don't like them expecting me to treat this like Brutus making a stand against Tarquin.

We shall call it "The Belgian Maneuver"!

bdunbar | Absence makes the heart grow fonder

Fourteen (Democrat) state senators remain absent, preventing debate on legislation. I'm torn.

You can't just leave because things aren't going your way: what is this, third grade?

On the other hand, if the lege can’t pass laws, then the lege can’t screw up our lives worse than they already are.

Maybe we can convince the Republicans to join their brother legislators in Illinois and leave the rest of us alone

I am similarly torn.

~ ~ ~

PS See also:
View From the Porch | Tam | The Party of "No!"

Taking a cue from their cheesehead comrades, Indiana's Democrat legislators have fled the state.

Perhaps they all decided to take a roadtrip to the newly-opened National Institute for Civil Discourse?

If I can't win, I'll just take my quorum and go home.
Is there some sort of interstate extradition agreement for fleeing parliamentarians? Because this is turning into musical chairs: plenty of legislators, but none of them in the places they started in.

18 February 2011

"Mao's Great Famine"

Frank Dikötter's book sounds like it would make good companion reading when I finish Bloodlands.

The sections in the latter dealing with the Soviet famines of the thirties, especially in the Ukraine, stood out to me for some reason. Perhaps because all the class and ethnic mass murders and executions of POWS and dissidents is evil, but intentional famines are evil AND stupid. Stalin not only ordered the seed grain not only eaten but sold for export and then was shocked when there wasn't a lush harvest the next year.

Here's some Bryan Caplan commentary on Mao's Great Famine:
Frank Dikötter's Mao's Great Famine firmly supports a simple but shocking theory of Communism: It was the largest cargo cult the world has ever seen. Communist revolutionaries were great at seizing power, but if power were their sole aim, the horror would have ended once they were firmly in charge. Alas, the Communists saw absolute power as a mere stepping stone to their true goal: Mimicking a few random characteristics of advanced economies, no matter how many lives it cost.

Take steel. Since modern countries have lots of steel and backwards countries have none, the Communists strove to make a big pile of steel - or at least something that vaguely looked like steel. As Dikötter explains:
Steel was the sacred ingredient in the alchemy of socialism... Steel output magically distilled all the complex dimensions of human activity into a single, precise figure that indicated where a country stood on the scale of evolution. Mao may not have been an expert on industry, but he seemed able to rattle off the steel output of virtually every country at the drop of a hat.
During the Great Leap Forward, the result was a system where hundreds of millions of peasants were forced to throw their perfectly serviceable iron utensils and tools into backyard furnaces to make worthless pseudo-steel sludge. Who needs knives? Modern countries have steel!
Warren Meyer thinks the cargo cult explanation isn't all there is to it, but nonetheless a contributing factor. I agree. If you have no prices, or do not trust them, then what else do you have left to give you information besides opinions and superstitions?

He sees some of the cargo cultishness living on in America today:
High speed rail and mass transit strike me as classic modern examples — great cities of the world have large mass transit systems so therefore if our city builds a rail system we will become great.
What other examples are there? Stadiums spring to mind.* There's no way the economic impact statements on stadiums rise above the level of voodoo.

You see a lot of cities and towns sinking money into various technology incubator facilities in the hopes of becoming the next Silicon Valley or Mass. Rte 128.

On a more micro level I think a lot of the technology equipment schools buy has been justified with some cargo cult mentality.

I could read Paul Krugman as engaging in temporally-based cargo cult thinking.  "The fifties were great for the American economy," the thinking goes, "so if we can just recreate a few aspects of the fifties like highly paid, low skilled manufacturing jobs, we'll get the whole package of the fifties again."

Many African countries have treated their militaries like cargo cults in the last ten years or so by sinking mineral resource revenue into mimicking the latest defense toys of more developed nations without regard to how they fit into the overall strategic situation.

* Speaking of stadiums, discussion of publicly subsidized stadiums have been crossing my feedreader lately, especially with a potential impending NFL labor lockout. Here's my question: Bob Kraft managed to build a magnificent stadium for the Patriots without any public financing. Does this make him a hero for not fleecing local taxpayers, or does it make him a dupe for not fleecing local taxpayers? Thoughts?


I find this simultaneously hysterical and disturbing.  Now that I think about it, that's how I find most of politics.  This is just extra hysterical and extra disturbing.

Fleeing the state?  Really, Dem legislators?  Really?
Houston Chronicle / AP | Scott Bauer | Wis. lawmakers flee state to block anti-union bill

MADISON, Wis. — Faced with a near-certain Republican victory that would end a half-century of collective bargaining for public workers, Wisconsin Democrats retaliated with the only weapon they had left: They fled.

Fourteen Democratic lawmakers disappeared from the Capitol on Thursday, just as the Senate was about to begin debating the measure aimed at easing the state's budget crunch.

By refusing to show up for a vote, the group brought the debate to a swift halt and hoped to pressure Republicans to the negotiating table.
Those would be negotiations to reach a "compromise," which in this case means "giving us what we want (even though we're in the minority)". Curious they're suddenly so interested in negotiations, seeing as how the unions refused last month to renegotiate compensation with the State.

Jon Erpenbach, one of the legislators-on-the-lam said he was fleeing because his constituents "hadn't been heard on the issue yet." I think they were heard pretty loud and clear last election day. But maybe mobs of special interest groups are a better way of "hearing" the citizens than are general elections.

Don't get me started on people comparing Walker to Mubarak. Really, protestors? You're chanting "Freedom, Democracy, Union" while trying to block a vote from occurring. Do you have any sense of irony?

Some of the more militant libertarians need to be reminded that being asked for your license and registration when you're pulled over for speeding does not make America a "papiere, bitte!" fascist nation. They need to be reminded from time to time to have some perspective.  Not everything that doesn't go your way is the end of the world.

So let me give the same advice to all the protestors in Madison: GET OVER YOURSELVES! Being asked to contribute 1/17th of your pension costs and 1/6th of your health care premiums is not a mortal affront to your dignity, liberty, or perpetual honor. It's a better deal than millions of your countrymen are getting. Look around you. There are legions of people who would love to have the offer you are fighting against.

For that matter public employees in most other states don't even have it this good, to say nothing of the private sector. Half of states don't allow collective bargaining at all. And those that do have only allowed it in the last few decades. This is hardly some basic human right that's being infringed here. Even FDR thought public sectors unions were a bad idea. Hell, the first president of the AFL-CIO thought they were a bad idea!

The War Over Government Spending will be one of the few defining conflicts of my generation. This is the first battle in that war.

PS Obama's Organizing for America has a big hand in ginning this up. I'm so glad we're living in a "post-partisan America" now.  All politics is special interest politics.

PPS Let's cue up some film of C.Christie:
Policeman: “My salary went up 2%. And after the increase in my healthcare costs went in, do you know how much my check went up Sir? $4. How am I supposed to live on that?”

Gov. Christie: “Here’s the difference. You’re getting a paycheck. And there are 9% of the people in the state of NJ who are not.”

One more DC item

I'm so disappointed I didn't see this until after I posted my DC links this morning.

Via The Daily What:

Tab Clearing: Local Edition

Curious why DC is a mess?  Here's one illustrative anecdote for you:
DCist | Catherine Finn | Reeves Center Deli Owes $350K in Back Rent

Not only that, the rent isn't exactly high - about $12 per square foot - less than a third of market rate. The owner, Fitwi "John" Tekeste, hasn't regularly paid rent in 11 years.
The Reeves Center is a city building in a prime location (14th & U).
Tekeste contends that he is getting kicked out, not because of the ridiculous amount of rent he owes, but because of political reasons. He thinks that outgoing Fenty officials are kicking him out because he supported Vincent Gray.
Right. I'm sure that's it.

~ ~ ~
Cato @ Liberty | Michael F. Cannon | Wal-Mart Could Help DC in More Ways than One

It's good news for residents of Washington, D.C., that Wal-Mart is planning on opening four stores in the District. Yet Washington Post columnist Robert McCartney reports today on one curious source of opposition:
"There'll probably be a lot of shoplifting going on. They'll need a lot of security," Terriea Sutton, 35, said.

Brenda Speaks, a Ward 4 ANC commissioner, actually urged blocking construction of the planned store in her ward at Georgia and Missouri avenues NW partly because of that risk. Addressing a small, anti-Wal-Mart rally at City Hall on Monday, Speaks said young people would get criminal records when they couldn't resist the temptation to steal.
Of course, that's a rationale for banning all stores, not just Wal-Mart. Perhaps we should isolate these youths and consign them to abject poverty, so they'll never be around anything worth stealing.
Imagine if the roles were reversed and Walmart refused to put a store in a poor neighborhood because "young people [there] couldn't resist the temptation to steal." Somehow I think that if Walmart had said something that ridiculous and racist the reactions to this would be somewhat different than what I've seen.

~ ~ ~

Jack Johnson, PG County's very own minor league Clay Davis, has been indicted in federal court on eight counts of conspiracy, bribery and extortion.

PG County's "ethics" board did not meet at all last year. They received no complaints of corruption. But they also have no way of taking complaints. They have no budget. No power to gather testimony. And no way to dole out punishments. Quis custodiet, where ya at?

~ ~ ~

DCPS will apparently be forced to re-hire, with back pay, some of teachers Rhee got rid of during her tenure. These were not just teachers who were let go for administrative reorganizations or for poor test performances. Oh no indeed:
Among a laundry list of issues principals had with the fired teachers: a teacher who was "AWOL from school since May 5, 2008," "sketchy or non-existent" lesson plans, one educator who posted "24 tardies and 20 absences following a sick leave, mostly call-ins on Mondays and Fridays," and a teacher who allegedly told students to go to hell, but argued it was okay because the word was found in the Bible.
There are hordes of people out there who would love a job as a teacher. (I am married to one of them.) Most of those people will actually show up to work and do their jobs. It strikes me as psychotic that a union would want to stand up for a member if they did this when they could instead have a new member in possession of basic responsibility.

~ ~ ~

"Dog Shot By D.C. Police Officer in N.W. Gated Community"

The dog, a chocolate lab, was reported as recovering at a veterinary hospital, thank God.

The shots were apparently necessary because the dog "did seem to be coming at him pretty fast."

When I was about 5 or 6 I was afraid of dogs. Even then I was slightly ashamed of what I recognized was an irrational fear.  (Though I was about as heavy as a lab back then.)  Kids get ridiculed for being afraid of dogs.  But here's a cop, a full grown man, who is apparently so pants-shittingly afraid of the dog's "pretty fast" appraoch that he needs to resort to his sidearm. We would never accept such violent behavior out of a FIRST GRADER. Why is it acceptable for the adults who are supposed to be the most calm and dauntless people on our streets?

17 February 2011

Final Budget Post (I Promise)

Even I'm tired of listening to myself talk about this, so here are some links.

The Atlantic | Megan McArdle | Time to Get Serious About the Deficit

I was a laconic hawk when the deficits shot up in 2008, 2009, 2010. A few years of deficits in an unprecedented crisis weren't going to kill us; we had time to get them under control.

But I'm starting to think that it's time to panic. This deficit is $700 billion higher than the CBO projected in August 2009, of which $500 billion is lower tax revenues, and $200 billion is new spending. It's also $500 billion less revenue and $100 billion more spending than the CBO was expecting as late as August of last year, thanks to the extension of the Bush tax cuts. For all that I keep hearing about deficit reduction and PAYGO rules, somehow those "fiscally responsible" Democrats have given us the largest peacetime deficit in history, one that keeps growing beyond all expectations--and for all their alleged worries about the budget deficit, so the Republican role in all of this has been to goad Democrats into cutting taxes even further, so that the wealthiest earners could enjoy their fair share of our collective fiscal insanity.

I know the arguments for stimulus, but at this point, I don't think we can afford the luxury of a more stimulating economy. Our politicians can't be trusted to do the right thing later; we need to make them do it now. If we let them, our politicians will give us deficit reduction that is all jam yesterday and jam tomorrow, but never jam today--and we'll end up in an ugly fiscal crisis that will force ugly tax hikes, cruel and sudden service cuts, and ugly debt service requirements on all the folks on both sides who are hoping that if they delay long enough, they can somehow get a better deal for their side. Unless politicians get serious about deficit reduction right now--not seven years in the future--they're going to tax-cut-and-spend us straight into the poorhouse.
See also McArdle in that post and this one about the way ObamaCare and this budget pay for services right now with revenues spread out over ten plus years. That's not sustainable.

This post gets at my biggest budget concern. You might say it's a meta-concern. And it's simple. Where are the adults?

Who is giving the bad news? Obama head faked in that direction with a lot of empty talk in the SOTU, but then delivered this heaping mess. Who is the one willing to stand up and point a finger at the recipient of some government largess and say "you, you sir right there in the front, will not get to keep having your dessert, it is now time for vegetables"?

Politicians in the UK and Japan seem to be willing to give voters bad news and be unpopular right now. Who's going to step up to the plate in the States?

(I'm digging way back to my comparative gov class years ago, but I seem to recall one of the down-sides of the parliamentary systems in both of those countries was that it was theoretically difficult for the government to make unpopular-but-necessary decisions because elections could be called at any moment. Why is it that the only two examples I can think of governments getting stern both have parliaments of that type?)

Another one of Don Boudreaux's solid letters-to-the-editor, titled "And That’s Assuming the Cuts Actually Occur"
After describing Pres. Obama’s proposed budget for fiscal 2012 as reflecting “dramatic cuts to federal spending,” you write “He ended up with a product that offers up more than $1 trillion in deficit reductions over a 10-year period – three-quarters coming from spending cuts and the balance from tax increases or the elimination of existing tax breaks” (“Obama Releases $3.73 Trillion Budget,” Feb. 14).

In other words, over the course of a decade, annual spending will be cut by an average of $75 billion.

Only by Washington standards does a two-percent spending cut qualify as “dramatic.”

Donald J. Boudreaux
Boudreaux also links to this clever chart.

Kids Prefer Cheese | Angus | A horse is a horse...

...of course of course, but sometimes it turns out to be a Trojan horse. Like the stimulus bill.

Timely, targeted, and temporary?

We can debate the first two Ts, but the third one turns out to be false. The stimulus spending levels now apparently are permanent. I for one am shocked. President O has unveiled his "pain" budget of a mere $3.73 trillion, freezing spending in some areas at their 2010 levels.

Gee, thanks!

Of course even this bogus freeze does not apply to our President's favorite toys: choo-choos and windmills (and electric cars too!).
A budget can not be a ratchet. Not even Keynes would think perpetually non-decreasing spending is viable.

Cf. this Kling post:
EconLog | Arnold Kling | A Budget Paradox

Consider the following two sentences:
1. It is very difficult to cut Federal government spending, because so much of it is mandatory.
2. It is very difficult to increase Federal government spending, because so much of it is mandatory.
Reciting sentence (1) gets you admitted into the club of Expert Budget Pundits.  Reciting sentence (2) gets you sent to the loony bin. Or at least to the data, which show that Federal outlays went up 108 percent from 2000 to 2010, while the Consumer Price Index only went up 26 percent. (Below the fold, I will give a breakdown of outlays by category, if you would like to see that.)

The data indicate that it is not very difficult to increase Federal government spending, in spite of the large portion that is mandatory. Why not? Some hypotheses: [...]
I like the hypotheses, but the conclucsion is the key:
Or maybe the answer to the paradox is that when it comes to the Federal Budget, spending is discretionary when somebody proposes an increase in its rate of growth but mandatory when somebody proposes a decrease in its rate of growth.

Russ Roberts has a similar take to Kling's:
Cafe Hayek | Russ Roberts | Budget puzzle

In fiscal year 2007, the federal government spent $2.7 trillion. In 2010, the federal government spent about $3.7 trillion. Obama is proposing to spend that amount next year. Data from here. [PDF]

That’s an extra TRILLION dollars in three years. Yet I keep reading that only 20% of the budget is “discretionary,” a silly word that seems even sillier in the face of these numbers. [...]

The brave Republicans are trying to cut $100 billion. That sounds like a big number. Compared to $3.7 trillion it’s a very small number.

So what would be so hard about going back to the level of nominal spending in 2007 of $2.7 trillion? Why isn’t that proposal on the table?

Keith Hennessey offers this graph:

I hear ominous music whenever I look at it.

I am not sure how you look at this graph without concluding the inmates are running the asylum.  This is pure lunacy.

I can understand people who think government spending should be higher than it is now.  I disagree, but I can understand it.  What I do not understand is thinking spending should be higher than it was the prior year, every year, forever.

A similar offering from Political Calculations:

Today has become Unofficial Blog About the Budget Day here at SB7

One other thing that bothers me when we juxtapose budgetary concerns about big stuff like Social Security and Medicare against little stuff like PBS and CPB.

When you propose attacking the big stuff, statists say that they're much too big and important and the consequences of cuts would be dire.

When you propose attacking the little stuff, statists say that they're much too insignificant, and you'll never cover the ground you need to with small potatoes, and since we're spending all this money on the big stuff surely we can afford a bit of money for the small stuff.

In isolation, either of those statements is reasonable.  But taken together, they're bullshit on toast.  We've got to start somewhere.  It seems like everything is off limits, either for being too large to digest or too small to matter.  That was the best thing about the proposal from Obama's bipartisan budget committee last fall: they put everything on the table.  Obama's pretty much ignored that and put nothing on the table.  (Or more accurately he's trying to force the GOP to be the ones to put the first sacred ox up on the alter.)

Concerning the last two budget posts

If people are concerned that cutting federal spending will leave old people to suffer and die, then shouldn't they be especially willing to axe things like the Corporation for Public Broadcasting?

Even if you raise taxes there's still only so much money to go around.  (And federal revenue as a percentage of GDP is pretty constant in the post WWII years, no matter who's in charge, so there really isn't some big extra pot of revenue waiting to be uncovered to let us have an all-you-can-eat budget.)  What kind of twisted never-never-land world free of trade-offs do you have to live in to say, as Obama's budget just did, "Let's not use our resources to make the social safety net sustainable, and instead devote extra  resources to building more trains and windmills."

If you want to continue transferring more money to the unfortunate -- and as far as libertarians are concerned I'm pretty willing to do this -- then you should be especially interested in ceasing to transfer money to the non-particularly-needy.  Bankers, yes certainly, I agree with the Left about that.  But farmers as well.  And the relatively well-paid unskilled laborers in Detroit.  And relatively prosperous retirees.  And   the relatively well-off defense contractors.

If giving medical resources to people who can't afford them is a moral imperative, fine.  Make it a priority.  But don't talk about it as a moral imperative when it's time for rhetorical justifications and then throw it into a pile with all the other spending programs when it's time to write checks.  The more important socializing the costs of health care is to you the more you should be willing to slash other items in the budget.

We need to make some trade-offs.  To do that we need to identify priorities.  What's the most important thing for the federal government to be spending money on?  Looking at Obama's budget proposal it looks like his answer is "Everything."

PS I could re-write this post critique the Red Team just as well.  They freak out (or pretend to) and claim that any defense spending cuts at all will see terrorists streaming into America to kill us all in our sleep.  If that's really such a dire threat then they ought to be especially willing to cancel mohair subsidies and mortgage interest deductions and raids of marijuana dispensaries and other lower priority concerns.  But I hear them singing the same "everything is the most important thing" song.

Stewart swings and misses

In Other News

Jon Stewart, on the GOP’s curious targets for budget cuts: “Our only way out of this mess is to cut programs that affect people who vote for Democrats.”

Does Stewart realize how simultaneously banal and biased that opinion is?

If I was on the Red Team I could take exactly the same facts and make the opposite story out of it. "Democrats fight to protect spending that benefits people who vote Democrat!"  That would be just as true of a headline, and just as useless because it's still half the story.

One patron wants to use public funds to support its clients, and the rival patron wants to interfere.  What's curious about that?  And why is only one of those patrons judged to be acting against the public interest?

Budget Seriousness

L'Hote | freddie | actual seriousness

Here's what you won't find at the Daily Dish, or at the Corner, or in any of the other places showily demanding seriousness: the actual, human, negative consequences of harsh entitlement cutbacks. I mean, from reading online today, you'd be hard pressed to know why we have Social Security and Medicare at all. I'll tell you why: because our winner-take-all economic system leaves defenseless, impoverished people in its wake. We have Social Security because the sight of so many elderly people left literally homeless and starving , too old and weak to work, was unseemly to an earlier generation that was willing to take less for themselves to provide for others. We have Medicare because it is an obscenity for a country responsible for the atom bomb and the moon landing and the Hoover Dam to allow suffer and die from lack of health care access due to the vagaries of birth and chance. That's why those programs exist.
Everybody please stop going back to the same "but we put a man on the moon!" well. It's lazy, and it's a bit dishonest. It's a justification for anything. It's non-falsifiable. Look: This is the country which built the most powerful weapon the world has ever known. So how can we not provide a rifle to every household in the land. Even Switzerland manages to do that!

Let's try another one: We built the Hoover damn for god's sake! If our society can do that, then everyone should get free water and electricity.

These seem like non-sequiturs, but they make at least as much sense as "We put a man on the moon therefor we need to pay for every old person's drugs."  Achieving a difficult thing does not obligate you to do everything that people think is easier than that thing.

Imagine if you actually lived our life that way. I could afford to take that vacation, so obviously I can afford to eat at that new restaurant. And I got a new computer, so how could I not also be able to provide a new watch? I ran a marathon last year, so of course I should walk up to my office on the twelfth floor everyday.  Individually any one of those things makes sense, but you can't keep using the same justifications for every new activity.
Cutting them will lead to human misery and death. It will. Cutting Social Security will mean the difference between subsistence and a pitiful existence for untold thousands of senior citizens. Cutting Medicare will mean some people won't get the health care they need when they need it and will suffer the physical pain and indignity that comes with that. That's just the way it is. Yet I keep reading all of these very serious people today failing to mention this reality at all. It's as if we have entitlement programs for no reason.
I'm looking around today and I see a lot of retirees who are a lot wealthier than I am. Remind me again why I'm transferring money to them. Surely not to avoid their imminent suffering. If that's what you're worried about then where's the means testing? Don't rhetorically prop up this entire edifice on the backs of the few people who need it. It's either a (shitty) retirement program, in which case everyone gets some, or it's a welfare system, in which case only the needy should get it. It can't the latter when it's time to make justifications, but the former when it's time to pass out checks.

And Really? Misery? Death? Federal spending on Social Security and Medicare is up 76% and 132% since 2000, respectively. (The CPI is up 26%, and there are 13% more people over 65.) Do you remember hordes of old people keeling over in the streets in 2000? I don't. I remember it as being a pretty fine time to be alive, for young and old alike.

But why bother rolling the clocks back that far? Wasn't all our stimulus spending supposed to be "timely, targeted and temporary?" That's what I remember our Fearless Leaders promising at the time. So let's just revert back to 2007's budget. Obama's proposed outlay for next year is a TRILLION dollars higher than 2007's. That's 37% higher. I don't recall a lot of misery and death in 2007.
Phony, showy seriousness is built on complaints, vague talk about thrift and national virtue, and a studied, preach-to-the-choir attitude where well paid journos and pundits see who can outdo each other in advocating measures that will be painful to others but painless for them. Actual seriousness means wrestling with the very serious and real costs of the harsh measures you're advocating. You don't get to show your courage in being ruthlessly pragmatic if you aren't willing to show who you are being ruthless against. The first step is showing the victims. Perhaps if Sullivan gets the deficit-reducing budget he wants, the Dish can start a "Homeless Grandmother of the Day" feature. Democracy needs that sort of thing; it's far, far too easy for people to operate in generalizations that preserve the illusion of painlessness.

Some people will lose jobs. Some people will not get their rents. Some people will not get to consume more than they produce. This will be painful for them. But this is reality. We can not all endeavor to live at each other's expense to the degree we have become accustomed in the last decade. There is your reality.
We do not have the money to pay for all of these things. Freddie does not seem to be disputing that. He is only distracting us. The degree of suffering that cutting spending will have, by itself, is immaterial. If there would be no suffering, we would have to cut spending. If there was immense human suffering... we would still have to cut spending.

And the further we delay, the more suffering there will be when the bill finally gets settled. Seriously, would you rather inflict a little pain now, when we have a bit of control over it, or wait for the bond markets to inflict a lot of pain later whenever they finally get antsy?

Cutting spending is not optional. It's not something we do if it's painless, but don't do if it's painful. It must be done. Let's not ignore the pain, but let's not use it as an excuse for avoiding making the difficult decisions either.

(Via McArdle)

PS I agree with Freddie that we should drastically reduce military spending and especially foreign deployments. But shuttering those over seas bases is not something done overnight. It's best to ease into it, like all spending cuts. Better to start now -- with the Pentagon's budget and everyone else's -- than to wait for the fiscal plane to fly into the mountain and then slash everything all at once.

16 February 2011


The Economist: Free Exchange | K.N.C. | China and Japan, moving apart

NOTHING stays the same forever. This week, fresh economic data confirmed what everyone has known since last summer: China surpassed Japan to be the world's second-largest economy sometime in 2010.

What do the figures mean? China is number two in market exchange rates, in American dollars. In terms of purchasing power parity (which takes into the account the differences in prices in different economies), China became second largest many years ago. And in terms of per capita GDP, the Chinese only enjoy one-tenth the national income of the Japanese. It will take a long time for China to catch up in that respect: they number 1.3 billion people, while Japan's population is declining (which could actually boost their well-being by this measure, provided the economy does not shrink).
The real story with China is not "how did their economy get so large?". It is "how is it not already the largest?" (Mutatis mutandis, India.)

China has a population over a decimal magnitude larger than Japan's and is only just now out producing them.  People are weirded that third world nations have been catching up. I take a different view: it would be very weird if they didn't.  People fret that within x years the PRC will be "out producing" the USA.  So what?  It would be bizarre if a set of people three times larger couldn't do that.

Watson vs Man: Half Time Report

So the after-action story about Watson seems to be buzzer speed. The IBM computer beat Jennings and Rutter to the punch 24 out of 30 times last night. I don't have stats from the first night, but it was similar. Jennings was visibly rattled. Reading between the lines, he admitted to buzzing in first and trying to figure out the answer later in desperation.

This was a concern of many people's before the match. Someone asked one of the IBM research representatives about it at the event I went to, and it was brushed off with something about how human players can also anticipate the end of the question to up their reaction time. I'm not sure if they were being cagey because they knew it their machine an advantage with the buzzer or because they weren't that involved with this particular project and legitimately didn't know how the timing was handled.

I can think of a couple ways to address this. One is to ask some psychologists, who know more about reaction timing than seems in any way usable, to set up a model and delay Watson's reaction so that it matches human timing.

The one I prefer though, being a quiz-show geek, is to abandon the Jeopardy format.

I participated in various TV quiz shows and tournaments in my youth (e.g. It's Academic), and in all of them you could ring in (for most types of questions) at any point after the question had started. This makes for worse TV, since the audience doesn't get a chance to hear the end of the question and thus it is harder to "play along at home." On the other hand it makes the game much more complicated because you need to think not just about what the answer to a question is, but anticipate what the question itself will be.

(In addition questions are often formed in the "pyramid style," so that they begin with obscure clues and become progressively easier. Jeopardy clues are formed for benefit of the home audience, so many of the supplemental bits of information are more entertaining than informative.)

A side effect of this emphasis on anticipation is that your physical buzzer speed is less important. With good anticipation you can give yourself a head-start, lessening the impact of having a slow button finger.

Watson would have to be modified to deal with this situation, of course. For one thing, Watson now receives a text string containing the entire question as soon as it becomes visible on the video monitors. To play my version of a quiz show, he would need to be given each word one-at-a-time. Once again, consult some psychologist to model reading speed and use that model to dole out input at human rates. From a machine learning perspective, Watson would now need to do online updating to his thought process. (That has nothing to do with the internet, by the way. "Online" simply means your data is available as a stream, and you need to be able to form hypothesis with partial information and update them as new data comes in.) That actually seems much more interesting for the statistical word association paradigm Watson uses, since one new word can change the previous ones a great deal.

PS I have just learned It's Ac is the longest running quiz show on TV. Cool.

15 February 2011

"Most Human Human"

eddie left a good comment in my previous post about the Loebner version of the Turing Test:
Offering a "most human human" prize is a mistake; it skews the incentives away from the purpose of the exercise.

The purpose is to encourage the development of computers that can interact indistinguishably from humans engaging in normal human activity. But by providing a prize to the most human human, they've turned the challenge into "develop a computer that is indistinguishable from humans who are attempting to signal their humanity." Not only is that harder, but I think it's not as interesting or useful as the original concept.
This is quite right.  (Emphasis added.)

It's been a long time since I actually read Turing's paper proposing his test, but I think the original thinking was predicated on the assumption that if a computer can do free-form conversation about anything then it can do more useful, topical conversation as well. I think that's understandable but wrong, just like the assumption that a computer should have been able to drive a car before flying a plane.

I think my version of the test would have more goal-oriented conversations, so that the computers would be trying to mimic not just a generic human, but a concierge, or a salesman at a cellphone store, or a HR benefits coordinator. The thinking is that we don't just want computers for the purposes of banal chatting. I don't need a computer if I want to prattle about the weather, all I need for that is to step into an elevator. I do want a computer that can help me pick up the rental car I reserved quickly and painlessly.

Maybe that's not as good of a test of some abstract intelligence, but I think it's a better test of what we actually want.

PS I'd also like to propose another test, since computing systems are often criticized (I think unfairly) for not being capable of doing "creative" things.  My test would be a photography challenge.  Set a robot and a person loose in an environment with digital cameras, and let the judges try and tell which photos were taken by whom.