Randoms of the day

February 28, 2011

AMcGuinn explains his support for secure and absolute rulers.

Move to where the white people are.

David Foster on education.

Patri points to an analysis of USG. They analyze USG as if it were a corporation (i.e. they use honest accounting) and find that its bankrupt. Obviously this sort of analysis is nearly impossible, but the report is interesting.


Bureaucrats never die

February 28, 2011

Matthew Yglesias defends bureaucrats. Unfortunately, neither he nor the guy he quotes from The Washington Monthly understand how bureaucracy works. Here’s the quote from The Washington Monthly:

In other words, if Congress and the White House agree to substantial cuts in the federal workforce but don’t also agree to eliminate programs and reduce services, the end result could be more spending and deficits, not less. Strange as it may sound, to get a grip on costs, we should in many cases be hiring many more bureaucrats—and paying more to get better ones—not cutting their numbers and freezing their pay. Because in many parts of government, the bureaucracy has already crossed that dangerous threshold beyond which further cuts can only mean greater risk of a breakdown. Indeed, much of the runaway spending we’ve seen over the past decade is the result of our having crossed that line years ago—the last time there was a Democrat in the White House, a divided government, and calls for slashing the federal workforce in the air.

The emphasis is Mr Yglesias’. Here some of Yglesias’ quotes:

When congress mandates reduced staffing levels but doesn’t otherwise change what the federal government is supposed to do, there’s no way to get the job done but to rely more on contractors. . . .

He runs down examples of how understaffing has wound up leading to runaway contract costs and huge overruns. But he also runs down examples of a more insidious phenomenon—understaffed regulatory agencies being unable to properly enforce existing environmental and financial regulations.

This issue is real – some agencies are significantly under-staffed. Unfortunately, the modern structure of government makes it impossible to solve this problem without creating bigger problems. In short, a bureaucratic job never goes away. I’ve complained before that bureaucrats can’t be fired. But my point here is more broad – once a bureaucratic job exists, it’s virtually impossible to eliminate that job. The job may transform but it’s not going to disappear.

For example, one guy in a group that I often work with was detailed to another agency for three years. No one was doing his job for three years. He came back a couple months ago. No one thinks it’s weird that his job still exists. In a rational setting, the fact that no one was doing a job for three years would be taken as a sign that the job was unnecessary. Not so in government.

The USDA still exists. Wikipedia tells us that it works to "end hunger in the United States and abroad." Indeed. It also processes the government’s payroll.

Thus the relevant question is not whether its more expensive to hire additional bureaucrats or additional contractors in 2011. The relevant question is whether it’s worth creating new perpetual bureaucratic positions. In general, I believe that it’s very unlikely that creating new perpetual jobs will be the cheap option in the long run.

History or economic theory

February 28, 2011

(This will be my last post on free trade, I think. Sonic Charmertwice – and Aretae both have some final thoughts as well.)

A couple years ago, if someone had told me that they were a protectionist, I would have reacted as if they told me they were a creationist. From an economic theory perspective, you either believe in free trade, or you’re an idiot.

However, free trade is an area where history and economic theory disagree. The puzzle pieces don’t quite fit, so to speak. History and economic theory do not merely disagree, they seem to directly contradict each other. Economic theory suggests that free trade is necessary for growth. History suggests that restricting trade is a necessary condition for development. Either historical reality or economic theory is – at least partly – wrong. This apparent conflict is why I am interested in free trade. In general, in conflicts between reality and theory, I bet on reality.

The application of other economic ideas to free trade also yields results that are not clearly 100% pro-free trade. For example, the application of marginalism to free trade is instructive. Let’s take the marginal industry. Assume that there is an incredibly tiny benefit for the US if there is free trade in good X. In other words, each good X purchased in the US will be very very slightly cheaper if the production of good X occurs in Korea (for example). This shift in production to Korea is good depending on what happens to workers that are now unemployed in the US. People can legitimately disagree about which side has greater costs and benefits, but I don’t think that they can legitimately disagree about this being the fundamental issue. Unfortunately, most free traders won’t admit the possibility that free trade is not a free lunch (this fact alone makes me very suspicious about their claims).

We should discuss free trade and trade restrictions in a realistic context. Realistically in the US, free trade must be accompanied by some welfare-style benefits to displaced workers. Thus, on one hand, we have free trade and welfare benefits financed by income taxation. On the other hand, we would have restricted trade resulting in more workers being employed, higher costs for consumers, lower levels of welfare benefits and lower levels of income taxes. Honestly, I’m not sure which situation is better.

Ultimately, I think the uber-pro-free trade argument depends on the belief that all people are essentially equal – that anyone can do anything if they try really hard. I reject this view. Some people in any country are not going to be able to do more than provide menial labor. I therefore think it’s at least plausible that a country could be too advanced – i.e. it could have more low-skilled people than it has low-skilled jobs. From a stability standpoint, this is a recipe for disaster. Again, if you don’t have a rose-colored view of humanity, this is a problem.

Finally, I don’t buy the view that economic growth is all that matters. If it is, then ending Communism was bad for Russia. Less snarkily, even if you agree that economic growth is the "god-metric," it does not follow that you have to support free trade. The theory of comparative advantage does not say that free trade will improve economic growth in the long run, it only says that it will boost economic benefits in the immediate-term. In other words, free trade is not about improving economic growth, it’s about making the current level of economic activity as high as possible. This may seem like a slight distinction, but if the goal is creating economic growth, it’s a distinction that is hugely important. Even less snarkily, try this thought experiment. Marriage – traditional marriage – almost certainly decreases economic growth. In many cases, it allows women to stop working. It creates less demand for housing. If I suggested that this was a reason to ban marriage, you’d – correctly – call me a retard. Nobody actually believes that economic growth is all that matters.

Traditionalism and game

February 27, 2011

Laura Wood has a series of posts on game that are worth reading. I particularly like Youngfogey’s defense of game in the first link.

Fixing public sectors unions

February 27, 2011

I’ve been surprised to read so many conservative and libertarian writers condemning public unions while supporting private unions. The former raise costs for taxpayers while the latter raise costs for consumers. I don’t see why the former is significantly worse.

The real problem with public sector unions is their interaction with the democratic process. Democratic politicians defend and enrich public sector unions, while the unions in turn vote for and fund the Democratic Party.

The Constitution has an oft-overlooked mechanism for preventing something like this: it bars residents of the District of Columbia from voting. In the old days, this prohibition meant that people employed by the Federal government couldn’t vote in Federal elections and we still can’t.

Unfortunately, modern forms of transportation now allow Federal employees to live in Virginia or Maryland and therefore to vote for (or buy) representatives. However, the solution is simple: prevent employees of the Federal government from voting. Similar solutions could apply at the state and local level.

Any takers?

Weekend randoms

February 27, 2011

According the video that Athol posts, the vast majority of sociopaths don’t grow up with a father present. Interesting . . .
Aretae: "In learning…especially past the 1st 100 hours of study on a given topic (which we can consider light overview, rather than learning)…the Aretaevian claim is that there is only 1 factor: Practice." Does this mean that you could turn a retard into the world’s most prominent experimental physicist with enough practice?

Don’t move to Texas.

AMcGuinn: "One of the most interesting things about politics in the last decade or so is that the fictions are breaking down."

Single In the Suburbs

Thomas smacks down some left-libertarians. I like this line, "Why should one reject IQ tests as “culturally biased,” and under what conditions? I have no doubt that there is some degree of cultural bias in IQ tests, but so what? As an employer, I may want employees who are not only capable of carrying out certain kinds of mental tasks but who also are attuned to the culture in which I operate my business."

Handle writes in opposition to pessimism among reactionaries.

Review of “The Story of O” by Pauline Reage

February 25, 2011

I know too that you are among those girls who have been to Rois­sy, and I imag­ine you’ll be go­ing back again. In prin­ci­ple, the ring you’re wear­ing gives me the right to do with you what I will, as it does to all those men who know its mean­ing.

I thought it was finally time that I read this book. It goes nicely with this article on the author, which concludes with one paragraph that does a better job of reviewing the book than I could:

But beyond its merits as a literary work, its merits or limits as pornography, there lies the paradox that this incendiary book was written by a woman who wore little make-up and no jewellery, who dressed with quiet elegance, who lived out a polite, bluestocking existence in a small flat with her parents and son. Beneath this unlikely exterior raged terrible passions. In the end, the most instructive aspect of the book is that it demonstrates the demoniac nature of sexuality in any or all of us. This quiet, learned woman understood the power of sex. She knew that desire can ignite compulsions to commit sudden, arbitrary violence and induce a yearning for voluptuous, annihilating death.

If you’re really interested in the darker side of sex and the darker aspects of the nature of women, you’ll enjoy the book. Interestingly, though the book is full of sexual torture, the worst and most violent torture is committed by women (to women).

That the fe­male of the species was as cru­el as, and more Im­pla­ca­ble than the male, O had nev­er doubt­ed for a minute.

Randoms of the day

February 25, 2011

Tyler Cowen thinks that it would be better if states had a disincentive to catch and punish prisoners. Clearly, he lives in Virginia and not in DC. He probably only comes into DC for Ethiopian food and then congratulates himself on his openness to diversity.

Ferdinand is starting a new project, which sounds great. I wonder if he wants a book reviewer . . .

I wrote about reactionary pessimism a couple days ago. Don Colacho says, "The Church’s function is not to adapt Christianity to the world, nor even to adapt the world to Christianity; her function is to maintain a counterworld in the world." I think that’s a good summary of the point I was trying to make about reactionaries. All we do is maintain a counterworld.

Matthew Yglesias lists possible reasons why education reforms can’t work: "Say it’s true that we don’t know how to make schools better. That could be for two reasons. One is that it’s an epistemological problem—we have no idea what makes a school effective. Another is that it’s impossible—learning outcomes are all about parenting and schools are irrelevant." Can you think a possible third reason?

The picture and caption from this Keoni Galt post made me laugh.

Speaking of GBFM, he’s on a roll in this comment section – don’t miss the GBFM approved spellings of butthex.

The irrational voter quandary

February 24, 2011

Sonic Charmer is in a quandary. I’m here to help.

I’ll go through Aretae’s post and highlight our points of disagreement. Sonic Charmer can then make up his own mind (I’d love to know what he decides).

Fact 1:

Free trade and labor-saving devices are EXACTLY equivalent domestically. Anyone who doesn’t understand this is simply economically ignorant. If you oppose free trade for domestic reasons, you should also be opposing industrial robots. The effects are EXACTLY the same. If you’re not opposing Industrial robots, because that position is insane, you should not be opposing free trade, because the results are EXACTLY the same. Oppose both, or oppose neither. The domestic effects are indistinguishable.

Aretae loves to say that trading with Japan is exactly (this is usually all capped or bolded) the same as a machine that turns corn into cars. This is a factually incorrect statement for a variety of reasons. First, such a machine is impossible – it cannot exist. Free trade with Japan can exist. More substantively, they are not equivalent with respect to long-term economic flexibility. A factory that produces cars can be turned into a factory that produces helicopters. A black box that turns corn into cars cannot. A factory that produces cars is staffed by employees that know how to produce cars (this may be helpful if the market later decides that it wants to produce helicopters, for example). A black box that turns corn into cars does nothing to increase, create or maintain human capital.

This "fact" actually gets to Caplan’s discussion of "make-work bias." It’s my proposition that Aretae and Caplan vastly underestimate the negative externalities associated with long-term unemployment. A society with lots of people not working for long periods of time is a broken (see, e.g., the current Middle East and North Africa). Or, if you prefer something closer to home, my normal commute takes me within a block a housing project in DC. The people who live in the project get paid not to work. The effects are there for all to see.

In my ideal society everyone would work.

Fact 2:
Free trade + taxation + compensating payments (welfare, workfare, retraining, whatever) is financially better for EVERY SINGLE PARTY IN THE WORLD than unfree trade.

Sonic Charmer, if someone tells you that they are 100% sure of all the costs and all benefits associated with all possible combinations and permutations of all possible trade systems, taxation systems and wealth transfer systems you should be very suspicious. It’s possible that you are dealing with a being who is omniscient, but it’s unlikely.

Moreover, this statement is so strong that one single counterexample can falsify it. I used the example of my uncle, the cabinet-maker, in my book review. He personally has been made worse off by free trade. Therefore, fact 2 is not a fact. It’s possible that our welfare/re-training system could be altered to make him better off, but the current system has not done so.

Finally, it’s not clear that what we should be most concerned about is maximizing the financial position of everyone. I would argue that we have higher concerns and I think this is our fundamental disagreement. If what matters most to you is the current level of wealth in society, you should listen to and agree with Caplan and Aretae.

Fact 3:
Trade restrictions do exactly TWO things. (1)Pay off favored constituencies at the cost of making the whole country poorer. (2) purchase support for politicians. They always incur a cost of (say) $1 from each of the 300M people in the USA, and pay GM $100M in trade benefits. Net $200M loss. Collecting $.50 from everyone in the country, and giving it to straight to GM is better for EVERYONE, except the politicians who are hiding the the net $ transfers behind anti-foreign bias.

Again, this is not a fact. A fixed and flat tariff would not satisfy criterion (1) or (2) and it is a trade restriction.

In addition, fixed and flat tariffs have existed, whereas complete free trade has not. If you really don’t want trade policy to corrupt politicians, I think picking the system that has actually existed is a better route.

Fact 4:
If I want to trade the Plums in my yard with my buddy Jesse’s Oranges, and some bozo with a gun says stop trading or I’ll shoot…because I want you to buy George’s oranges which are 3x as expensive…the guy with a gun is a Thug, and morally in the wrong. Full stop.

A tariff would continue to allow you to trade plums with whomever you wanted. Aretae’s system still relies on taxation (see "fact" 2). I see no reason why a tax in the form of a tariff is more thuggish or morally wrong than a tax on income.

Aretae then turns to my examples.

Oregon’s no self-service gas "tax". DUMB AS ROCKS. It is net welfare improving to hire teens to dig trenches, and refill them out of general revenues. Pretending they’re doing something useful is pure delusion. Digging trenches and refilling them is less value-destroying. Nearly everyone is richer…and the Thug-in-chief could probably target the tax better as well. OTOH, there’s undoubtedly also some transfer from the public to the Gas Station owners, which is why the policy persists.

No one is pretending that they’re doing something to enhance economic efficiency. Would you rather pay a guy to sit at home and play video games or pay them to show up to a job every day? It’s my position that the externalities associated with the latter are hugely positive, while the externalities associated with the former are hugely negative. I believe the only effective way to "educate," "assist," or "re-train" people is through having them do actual work – more time in classrooms or left to their own devices will not help. I really don’t think this is a difficult concept to grasp.

If you travel to any first-world Asian country, you can see the difference in action. Japan pays people to give directions to people in the subway system or stand on street corners and provide assistance, the US pays people to sit at home and play video games. Both involve inefficiencies and taxes. I think the former system has significant benefits over the latter.

Foseti’s grandpa the cabinetmaker. Every person in the country can be made wealthier paying Foseti’s grandpa his full cabinetmaker wages (and then some) out of taxes for the rest of his life to dig ditches and refill them, while not interfering with free trade than they would be by limiting free trade. Yes…Foseti’s grandfather has a vested interest in hiring thugs with guns to stop me from trading with cabinetmakers in China…he gets to do something that he is not (relatively) very value-creating at, because he likes it…even though it destroys wealth for everyone who wants cabinets. You may as well keep the buggy-whip makers, for all the value it builds.

It’s actually my uncle. Every person could be made wealthier if the system worked as Aretae suggests. But the system doesn’t work that way.

I find it fascinating that Aretae believes that any restraint of trade would be terrible because politicians will screw it up while simultaneously believing that politicians could run a perfect wealth transfer system without corruption resulting. What am I missing?

Randoms of the day

February 23, 2011

Steve Sailer makes an interesting observation on Japan: everyone says that it’s screwed, yet it seems to be doing fine. I’ve been to Japan. Tokyo functions much better than any American city. Even a trip through the airport will make American decline apparent.

Devin opines on libertarian thuggery:

Conversely, if an ultra-libertarian party came to power, slashed social security completely, and left senior citizens with nothing, they would be thuggish because they broke promises made to retirees.

Laura Grace Robins on craving cavemen.

Random thought: While I was on vacation a couple weeks ago, we met up with six of my wife’s college friends. They seem to be happy in direct proportion to which they are leading a 1950s style lifestyle (the happiest is the one who stays home with the kid, then the married one with a kid, then the married ones, and finally the single ones). I would never suggest that this template is right for everyone, but I would suggest that having a template is not a bad thing.

From Business Insider: “According to a 2009 blog post from ABC news, there are over 112 ways that news media has written the name of possibly crazy Libyan president, Muammar Qaddafi, since 1998. ABC, by the way, spells it Moammar Gaddafi.”