Friday, May 21, 2010

Is Rewarding Work Really What This Is About?

I seem to be finding the NY Times unusually interesting this morning. Brooks has a column that can be basically summed up as the reason for the votes for extremists from the center is that politicians are rewarding those who don't deserve it rather than those that worked hard and do. This is fine as far as it goes, rewarding work is about as controversial as saying that everyone should have food.

However, there's a flip side to this that I think is more relevant. People don't just want to reward work, they want to see idleness punished. This raises two issues. First, government's job is to solve problems, not give gold stars for good behavior. So the guy who works hard shouldn't get anything from government, his reward is that it stays off his back (leaving aside other duties of the state). When you have too big to fail banks collapsing however, government has to step in to try to isolate the problem to those banks rather than let their issues spread to those not immediately involved. This will inevitably result in rewarding some people who don't deserve it. Tough cookies. Though government does have a bit of a moral responsibility to make life inconvenient for those bailed out after the fact, say with a strong consumer protection board and perhaps a bank tax, on the whole though, this is a different topic.

Part two of this is at the more individual level. It's the resentment many people have of welfare and other programs that seek to make life's failures easier to get through. I understand why the hardworking example of Brook's column is likely to resent it, a lot of people get assistance from the government he never got despite working hard.

Here's the thing though, despite a lot of bleeding heart after the fact reasoning for these programs, they didn't originate in anyone wanting to be nice. The welfare state orginated with Bismark in Germany, one of the more conservative and reactionary politicians in modern history. They are meant to forestall revolution and to solve social problems. One of the differences that strike me whenever I read history is how remarkable it is that I can travel virtually anywhere in the world unarmed and alone. This was not the case until very recently and the existence of all of these programs for the idle seem to be a key part of what allows this.

In short, all these programs that upset the hard working individual for not rewarding work but instead helping the irresponsible are there not to reward idleness and incompetence but to isolate the effects of these things as much as possible to the individuals involved. The reward for hard work is that the state stays off your back, the punishment for idleness is that it steps in. Of course, it is also desirable for the state to help the idle lift themselves out of this state to become productive members of society but this is something of a special case of a more general rule.

Are We Japan or Greece?

While I believe the correct response is likely neither, I did enjoy Krugman's column today that takes up the subject. He's still afraid that we're stuck in a deflationary trap and that policymakers are doing too little to address it. I concur with him that the evidence seems to be pointing more strongly towards a Japan like situation than a Greece like situation but I think while there are some macroeconomic similarities in the financial and monetary systems we don't have the structural issues on the same scale that Japan did in our business sector. I'm not sure what effects this difference will have but I do expect the problems to be less severe than Japan.

I'll admit that I'm drawing a bit heavily from Katz's "Japan, the System That Soured". Very good book about the structural deficits in Japan's non-export sectors and the trade offs inherent in industrial policy. Since we haven't been pursuing an industrial policy I don't see the issues being quite the same. Though I do think there are enough parallels that comparing our long run recovery to Europe's will be helpful since there are some similarities in the amount of social responsibilities given to corporations both here and Japan that are fulfilled by the state in Europe. For a very brief read of Katz's standpoint, the summary of this Foreign Affairs article gives a very brief overview. The full article is available only to subscribers but I found the summary outlined things well enough.

Wednesday, May 19, 2010

Looks Like the Protests are Spreading

It appears the Thai government may have made a mistake in its crackdown on the Bangkok protestors. Anger over the crackdown seems to be spreading the protests to other parts of the country. While it remains to be seen if this will be a short lived outburst the more events spread outside the capital the more difficult it will be for the state to retain control.

The real question is what happens after the next election. Opinions have been hardened on both sides so will a government headed by either side be seen as legitimate? At this stage it looks doubtful without some other event occurring to lessen tensions. Better hope that the region starts experiencing some rapid economic growth since I don't see what other event is potentially on the horizon.

Tuesday, May 18, 2010

Immigration Generation Gap, and Some Free Association on the Subject

The NY Times today had an interesting article on the generational divide on attitudes towards immigration. I don't think many would find it surprising to learn that younger people are more accepting of it.

What interested me however was this: boomers and older Americans — even those who fought for integration — came of age in one of the most homogenous moments in the country’s history.

Immigration, which census figures show declined sharply from the Depression through the 1960s, reached a historic low point the year after Woodstock. From 1860 through 1920, 13 percent to 15 percent of the country was foreign born — a rate similar to today’s, when immigrants make up about 12.5 percent of the country.

But in 1970, only 4.7 percent of the country was foreign born, and most of those immigrants were older Europeans, often unnoticed by the boomer generation born from 1946 to 1964.

Here's the free association bit. While American history isn't my strongest subject a basic impression I have of it is that between the 50s and the 80s we pursued a number of highly wasteful policies. It isn't that we didn't have achievements, civil rights and the space race come to mind, but we performed rather poorly in long range investments in many sectors of the economy and public policies did little to maintain infrastructure and growth. Particularly I'm thinking of the gutting of our rail system and suburbanization both encouraged, admittedly indirectly, by government policy. On the whole, we seemed to be coasting during these decades squandering our resources on adventures abroad (Vietnam, Korea was expensive but necessary) and poorly thought out domestic initiatives while failing to think long term and invest our resources in long range projects.

Perhaps the lack of immigration had something to do with this. When we've been at our best, we've been capable of borrowing successful policies from all over the world as well as using our own inventiveness to improve upon these ideas or think of new ones. During this earlier time period however, we seemed to turn inward and focus less on what we could get from the rest of the world. Perhaps this was simply because our relative power was at its peak, the Soviet Union was a somewhat exaggerated threat from the 50s on, so we felt we had less to learn from everyone else. In any case though, these are decades that I'm not sad I missed, we failed to use our assets to provide well for our future. I'm more hopeful about the future but to seize it we have to reject what we were during these years and embrace what we were when our country was more diverse and more open to change.

Which is just another example of the generation gap. I reject the notion that these earlier decades marked a great time for our country, our greatness was too much the result of others' decline than our own powers. Those who would like to go back to how we were are ignoring the actual context of why we were at our peak. To get back to the primacy we held during those decades will be achieved not by seeking to return to what our country was then but by displaying the ability to change through openness and flexibility that we had in the years previous to the 50s that lay the groundwork for those years. We should embrace returning to earlier levels of immigration as a benefit, not as a threat.

Friday, May 14, 2010

Way To Go After the People We Most Want In This Country

This NY Times article describes how a student in Georgia is facing deportation because she got pulled over for a traffic stop. Apparently she came over here illegally when she was 11 and since then has excelled academically and is in college.

Couple of things here. First, this is exactly the kind of person we want in this country. What a waste of talent to go after her. Second, this law is going after someone that didn't have a choice in violating it. Half her life has already been spent here, what possible purpose does it serve to deport her now.

And it just gets worse. Apparently, Georgia doesn't like the idea of illegal immigrants not conforming to the stereotype of low wage agricultural worker and is seeking to keep them from going to college. From the article:
One Republican candidate for governor, Eric Johnson, has said that if elected he will mandate that all college applicants demonstrate their citizenship. The chancellor of the state university system says that would be prohibitively expensive, costing $1.5 million, for roughly 300,000 students.

What a waste, I'll never understand these people. It's just a single case, but it is symbolic of a lot of the mindset.

Thursday, May 13, 2010

I Would Have Liked to See the Suggestions if This Had Been Done for Health Reform.

Came across a link to the "I capped the well Competition" bit from Jimmy Kimmel. I would like to see the results of something similar for just about any highly technical issue, financial reform sounds like a good place to start. The comment boxes are an absolutely necessary feature to get the full value out of this however. The ways we currently try to get public input sound far less entertaining than this mode of soliciting public participation.

I suggest an I fixed the world campaign be posted in all public restrooms instead of gas stations, especially bars. The tickets to Lady Gaga as a prize are a nice touch but adding some additional selection of pop artists, maybe a Justin Biebur (spelling?) concert or an invitation to the playboy mansion would get the kind of responses that would keep politics interesting.

Don't think we'll get anything useful out of it. Though at least we'd probably here less about crowd sourcing after trying it. Then again, I haven't heard much about crowd sourcing recently anyway.

Things Aren't Looking So Good in Thailand

Apparently a rogue general working with the protestors has been shot during an interview with a reporter. I've been wondering whether or not things would boil over in Thailand, I now think it's pretty safe to bet they will. Once leadership starts getting killed events tend to start spiralling.

The situation had looked pretty unstable for awhile so it was probably more a matter of when, not if, some type of serious violence would occur (though there did seem a chance of a settlement a few days ago, nothing is ever certain in these kind of situations). I have little idea how things will turn out from this. I lean slightly towards the government being able to hold on and ultimately control events but it will be an ugly road to get there.

To some extent, the very focus of events on Bangkok seems to favor the government. While having the nation so focused on events in a single city makes it easier for a small group to have an outsize impact it also provides a clearer target for the government to seek to isolate and eventually control. On the whole, if the government can keep the worst of things in Bangkok I think they'll pull through. If this spreads things look bad for them. All this comes with the caveat that I'm thinking things through from more general comparisons and not specifically through knowledge of Thai politics.

Wednesday, May 12, 2010

Disappointing Choices

One of the few things that I think very clearly falls into the sphere of things government is best suited to do is long range research. Which is why stories such as this on declines in NASA's basic research capacity make me reflect on how badly we allocate our expenditures. If government won't do it, who will? To paraphrase a conversation I had with my supervisor today (on a completely unrelated subject) businesses "pay people to develop a better paint for refrigerators or a better motor. You won't be spending their money on finding a way to grow plants on a trip to Mars."

There should be a fairly obvious division of labor here. Government can do the pie in the sky type stuff that is too risky for any investor. Investors can develop the processes that will let us bring the successful portions to market. I think we're still a ways off profitable space travel so lets keep the basic research well funded.

Tuesday, May 11, 2010

Organization Kids

David Brooks has an interesting column today where he describes Elena Kagan as hewing closely to the personality type of an "organization kid." I hadn't heard the term before and found it interesting, though less so when focused on Kagan herself.

He describes their characteristics as:

These were bright students who had been formed by the meritocratic system placed in front of them. They had great grades, perfect teacher recommendations, broad extracurricular interests, admirable self-confidence and winning personalities.

If they had any flaw, it was that they often had a professional and strategic attitude toward life. They were not intellectual risk-takers. They regarded professors as bosses to be pleased rather than authorities to be challenged.

For a judge, I'm not really certain that lack of intellectual creativity is that much of a flaw so I'm not sure that Kagan was the best focus for this column.

More generally however, if Brooks is right that this personality type has become more common in the last decade, it certainly matches stereotypes that it has, this seems to be exactly the kind of people I don't want in charge of our country as we are facing yet another round of disruptions to the world system. With a rising third world, unsettled financial system, massive underfunded government liabilities, climate change, and domestically, a deeply flawed health care system and unusually deep partisan cleavage, we need disruptive thinkers willing to overturn the old consensus and pioneer new ideas.

Of course, I don't want to go too far with this, I didn't study at an Ivy League school and going off an article by Brooks (and another at The Atlantic) likely hasn't given me a fair perspective. It also seems likely that this is to some extent simply people criticizing those following different paths than they are. Despite these reflections what still concerns me is that our society may be becoming structured in a way that rewards following established paths so highly that it is no longer possible for others to break in. Society has always awarded conformists, particularly intelligent, educated ones, so there is nothing new about complaining about this. But it does raise the question about whether we've made it more difficult for anyone else to participate at higher levels or if strict adherence to a goal oriented achivement culture is now necessary to succeed.

What worries me about this is that when I have encountered what I take this personality type to be that I often see little flexibility. From the Atlantic, "I asked around about this and was told that most students have time to read newspapers, follow national politics, or get involved in crusades." What is the point of education and success if not to engage in these issues? If this summary is accurate, these sort of experiences strike me as something that would make it impossible to synthesize or apply what you are learning. It reminds me of extremely erudite people I have met that are well informed about everythying, and can accurately quote and summarize everyone else's arguments, but show little ability to synthesize and apply what they have learned. This makes for brilliant bureaucrats but I can't see this as providing the flexibility needed to lead our country into a changing world. I hope Brooks is wrong about this representing our elites accurately. It would be depressing if all the resources we pour into education and our supposedly meritocratic selection systems have simply led to selecting for over-achieving conformists.

[Edit: DIA takes up the same subject adding some interesting details]

Monday, May 10, 2010

Tough Choices but Aren't We Committed?

Not sure that I can put this article properly into a more general perspective but it seems to me that we've developed a commitment to treating AIDS that we have to see through. I tend to think other groups have more convincing claims, there are certainly very lethal diseases that can be treated more cheaply that have some hope of ultimately being eradicated. There is also a problem with the poor performance of the governments in the affected regions. Then there is the failure of programs designed to prevent infections leading towards an ever larger number of people getting infected despite treatment.

Despite all this, we've spent enough money on the programs and made enough commitments that it doesn't seem right that we aren't trying to find the resources to keep these programs funded. There is also the problem illustrated in the article of treatment resistant strains developing because of under-medication that poses an additional health threat. While I tend to believe we should have been spending the money on other diseases we could have made a bigger impact on all along we're far enough down the path that to maintain credibility we should be doing our best to increase funding and supporting anti-AIDS programs despite the difficulty. How many failures like Uganda does it take before people lose faith in our commitments to these sorts of programs?

A Close Look at Insurance Rate Hikes

The NY Times has an editorial today on the insurance rate hikes by Anthem in California. Two things jump out, first the complexity of the current insurance model and the need for sophisticated (read expensive) oversight to make it work. The second is that this is yet another piece of evidence that the private insurance model has an incentive structure that makes cost control difficult. The insurance company finds it most efficient to try to pass on additional costs to consumers rather than trying other methods.

Isn't part of the argument in favor of private markets that they will do better cost control? If that were actually happening, wouldn't the insurance company be trying to squeeze costs by leaning on providers rather than raising rates and forcing people either out of the market or to other providers (setting aside for the moment government intervention to prevent the rate increase from actually going through)? Something isn't working if the insurance company believes it is more effective to pass on costs to consumers rather than trying to influence providers to lower costs or discourage use of services.

Sunday, May 9, 2010

Book Review: Islam Observed

Islam Observed
Religious Development in Morocco and Indonesia

A lucky find at a local used bookstore provided a slim, but interesting, book to read as a break from Braudel. Geertz is a prominent anthropologist whose work has influenced the study of culture across disciplines, I read some essays by him in political science classes for instance. This particular book is one of his earlier ones and is based upon ethnographic research in Indonesia and Morocco. In it, Geertz is seeking to observe how religions respond to deep changes within society, the study of a single religion in two such very different countries always this comparison to be successfully made.

To develop his argument, Geertz quickly goes over the religious history in both countries as well as traditional myths about an early religious figure in each society who also comes from a period of great change. He also describes a more recent political figure that had special significance for each state's religious life, in Morocco Muhammed V and in Indonesia Sukarno. These sections contain a wealth of fascinating information and are a good example of using comparisons to learn about culture and development. He also develops descriptions of how religious views are structured in each state, despite both being Islamic the historical experiences of each have resulted in an Islam that emphasizes very different ways of being religious and very different qualities as being admirable in religious figures.

In the more theoretical portions, Geertz describes religion as being a "symbolic screen" through which experience is interpreted. Religion serves as a paradigm, it is not the result of experiences but exists prior to them and allows them to be interpreted in everyday life. In several places he describes religion as filling in the gaps in common sense, we cannot make sense of everything we experience solely through the lens of our own experiences of how the world works so we need a broader interpretive framework.

He describes this as a fusion of common sense with the ethos of religion which makes religion part of the common sense that governs everyday interactions. He distinguishes two qualities that he sees as describing how religion alters a religious person's world view. One of these is force, which is how thoroughly it becomes infused in a person's life and how central it is to a person's identity. The second is scope, which is the range of activities where religion is seen as seen as being more or less relevant. In the two countries Geertz considers, he describes Morocco as having a greater force but less scope of religious life. Religious considerations are more intense but regard fewer aspects of everyday life than in Indonesia where almost everything has at least some small tinge of religious significance.

An area of particular interest to me is Geertz's discussion of the reaction of religious thinking to newer influences. In particular, he describes the tensions that modern life is having on religiosity in these countries. In his view, it is not reducing the role of religion in people's lives or making them doubt their own belief systems but it is instead causing them to doubt their own piety. This is caused by an increasing divergence between the world of experiences which has been influenced so much by modernization and the world as represented through their belief systems, where before each reinforced the other, now there is a divergence that needs to be reconciled.

Responses to this have varied, the one I find most interesting is scripturalism which is a return to the text of the Koran and represents a rejection not only of secular thinking but also of the religious traditions of the past. This is where the book's age actually becomes a strength. It dates from 1968, a period where the Arab-Israeli tensions were mostly between states rather than non-state groups and before the Soviet invasion of Afghanistan, and obviously now our own, which has had a definite impact on studying Islam. Even where it is not the primary subject, I have read little on the religion that was written more recently that does not seem to have at least some influence from these events. Geertz's description of scripturalism of religion as an ideologization of it, as well as his discussions about the influence of modernity on the religious, certainly is informative of these trends that are so important today. But this is a reading of these trends after the fact, when this was written this was simply a possibility. From reading this I feel I have gained a valuable perspective on trends I know have led to radicalization that I could not have gained from reading more recent works on the subject where the direction these trends have reached today are known.

While the the book is worth reading for what it says about religion in general, or the comparative history of Indonesia and Morocco, or about comparative anthropology (or the comparative methods of cultural studies generally), I would most strongly recommend this book as a very concise way to learn about trends within Islam as they were understood before later historical developments. This is a perspective that I found surprisingly illuminating and given the work's brevity, just over 100 pages of text, would highly recommend it as a purchase for anyone that stumbles across it in a used book store (not sure I could justify paying for a new copy of a 40 year old book however, especially since Geertz has written several newer books, at least one that deals with his time in Indonesia and Morocco, though I'm unsure if the subject matter is quite the same).

Friday, May 7, 2010

I Can't Push This Enough

Yet another argument in favor of ending the home mortgage deduction (gleaned from Free Exchange). The only thing I'd like to add is that I believe the arguments in favor of encouraging home ownership are some of the weakest policy arguments I'm aware of. Since it's hard to get rid of an existing bad policy, for an example read about attempts to allow selling wine in supermarkets here in New York, I'd suggest putting in a grandfather clause for existing home mortgages rather than a permanent credit. I also think this would help get rid of the housing overhang since it would give an incentive to buy sooner rather than after the grandfather clause would expire so there's another reason for doing it.

This is Silly But So IS the No Fly List

One of the more ridiculous arguments currently going on in Congress is the debate over whether or not those on the no fly list should be able to buy guns. Personally, I think the list is far too broad and poorly executed so the more carefully it is used the better. Still, if you think someone is a potential terrorist preventing them from buying arms seems like the first thing you'd want to do, well before preventing them from flying. Our Congress critters really need to start thinking and get their priorities straight.

Tough Choices about Unpleasant Realities, New Guidelines on Female Genital Mutilation

Reading about this issue makes me squirm a bit despite being a man. Still, this is a pretty appalling cultural practice (though hardly the only one) that still plagues the world and gets brought over here, whether or not we'd wish it gets left behind. The American Academy of Pediatrics has now released guidelines allowing a ritual pinprick in an attempt to prevent parents from taking their daughters overseas for the procedure. The usual chorus of of denunciations has occurred as more absolutist groups cry out with slippery slope type arguments. While cultural practices are difficult to make calls on, I can think of virtually no examples where the slippery slope argument exists in practice. I do hope these groups will continue to monitor what the effects of the policy end up being though since this is a necessary component of any policy change.

I'll confess I don't know enough about the specific practice and the cultures involved to make a real clear call on who's right in this particular case. I'm just glad someone else is thinking hard about the subject and endeavoring to make tough calls on messy reality.

How Far We've Come Since the Cold War

This is entirely symbolic but it's worthwhile to reflect on how much the world has changed in the past 20 years. I'm sure you're aware of how important I think the Soviet Union's collapse was for world politics, the presence of American troops in a parade like this is a pretty meaningful symbol of just how much things have changed. Despite the changes, this still seems hard for some Russians to accept. On the other side, I wonder how hard it is to accept for those that would have been advocating a completely different meaning of NATO boots on Red Square 20 years ago? Individual's attitudes are hard to change, it's good to see the world moving forward despite this.

While we still have our differences with the Russian government on a social and culture level the changes are truly breathtaking. Perhaps we can continue to hope for even better relations in the coming years?

Thursday, May 6, 2010

What Happened to Those Legalized in the Last Amnesty?

This is a question I've been wanting to find an answer to, until now completely unsuccessfully. This story examines studies that tracked results of illegal immigrants legalized under the Immigration Reform and Control Act of 1986 and examined them again in 1992. The main result is it found significant upward mobility once immigrants were made legal. This varied among groups, notably lower for Mexican immigrants but does show that you cannot simply expect immigrants to stay where they are on the income scale once legalized. I'd like to track down more recent data, how do they look 10 and 20 years out? How do their children look? Still, this is a good piece of data.

Though I still think that any immigration reform needs to acknowledge this is an economic problem and needs to be dealt with in that fashion instead of through policies not adapted to regulating labor markets.

Survey on Political Typologies

This is an older survey that I had not been previously aware of. It seeks to break down political identification into recognizable groups that are more precise than parties. Mostly, it's an interesting way of looking at things that I thought I'd share. I am wondering though how much this would shift if the same survey were taken this year. Developments such as the Tea Parties seem to have added some wrinkles to this that may not have been there before.

I do think Douthat and Chait (where I originally saw this) are right about there not being this socially liberal and fiscally conservative middle out there waiting for a leader. This survey is a good enough example of why this and more generally I always thought it sounded like wishful thinking. Everyone wishes there was a political party that shared exactly there views. However, this seems to be the function of party factions, not parties. Personally, I think you're doing pretty well if you can get someone elected in your local election that shares your views, if that isn't happening in your district, maybe this should be the focus before trying to create a new party of wishful thinking.

Bruno Sentenced, Well, It's Pending at Any Rate

For those not familiar with NY politics, Bruno was on trial for depriving his constituents of their "intangible rights to honest services." In other words, for being a corrupt pol, nothing too surprising coming from the NY state legislature. This being an extremely vague statute however, he is so far allowed to stay out of jail pending a review of that particular law by the Supreme Court. We'll see what happens.

I think NY badly needs some reform of its legislature and a decent threat of punishment for its corrupt pols. There seems to be some movement in this direction but I remain skeptical it will ultimately result in anything. A good first step would be a better method for redistricting, the current method sounds a bit corrupt. About the only thing that seems bipartisan in the Albany legislature seems to be criminality. We've got Bruno, Monserrate, and Espada off the top of my head, all of which are less than stellar examples of the public's choice. We'll see what happens after the next election.

Wednesday, May 5, 2010

A Mistake I Hope To Never Make

Came across this in a rather drawn out discussion about immigration at the Economist's DIA blog. This page contains an assumption that is obviously wrong from the information contained within the post. This isn't new but hadn't seen it before and was a bit floored by it. Below are the relevant sections:

The Net Retirement Costs of Amnesty

Giving amnesty to illegal immigrants will greatly increase long-term costs to the taxpayer. Granting amnesty to illegal immigrants would, over time, increase their use of means-tested welfare, Social Security, and Medicare. Fiscal costs would rise in the intermediate term and increase dramatically when amnesty recipients reach retirement. Although it is difficult to provide a precise estimate, it seems likely that if 10 million adult illegal immigrants currently in the U.S. were granted amnesty, the net retirement cost to government (benefits minus taxes) could be over $2.6 trillion.

The calculation of this figure is as follows. As noted above, in 2007 there were, by the most commonly used estimates, roughly 10 million adult illegal immigrants in the U.S. Most illegal immigrants are low-skilled. On average, each elderly low-skill immigrant imposes a net cost (benefits minus taxes) on the taxpayers of about $17,000 per year. The major elements of this cost are Social Security, Medicare, and Medicaid benefits. (The figure includes federal state and local government costs.) If the government gave amnesty to 10 million adult illegal immigrants, most of them would eventually become eligible for Social Security and Medicare benefits or Supplemental Security Income and Medicaid benefits.

However, not all of the 10 million adults given amnesty would survive until retirement at age 67. Normal mortality rates would reduce the population by roughly 15 percent before age 67. That would mean 8.5 million individuals would reach age 67 and enter retirement.

Of those reaching 67, their average remaining life expectancy would be around 18 years.[17] The net cost to taxpayers of these elderly individuals would be around $17,000 per year.[18] Over 18 years, the cost would equal $306,000 per elderly amnesty recipient. A cost of $306,000 per amnesty recipient multiplied by 8.5 million amnesty recipients results in a total net cost of $2.6 trillion.

The report also contains this:

Education of Illegal Immigrants.Illegal immigrants generally have very low education levels. As Chart 3 shows, 61 percent of illegal immigrant adults lack a high school diploma, 25 percent have only a high school diploma, 5 percent have attended some college, and 9 percent are college graduates, according to the Center for Immigration Studies' estimates.[4] The Pew Hispanic Center estimates slightly higher education levels: 49 percent without a high school diploma, 25 percent with a high school diploma only, 10 percent with some college, and 15 percent with college degrees.[5] Overall, 49 to 61 percent of adult illegal immigrants lack a high school diploma, compared to 9 percent of native-born adults.

Thus, using solely the information from the report itself, at a minimum between 14% and 25% of illegal immigrants are not low skilled (assuming anyone with a college education is not low skilled, which I believe conforms with most definitions of the term). Yet, this page did the calculation as if all illegal immigrants were low skilled.

The bias here is so thick it is unreal. It gives the automatic assumption all illegal immigrants are low skilled. Furthermore, to give the appearance of balance, the article presents some of the weaker arguments made by pro-immigration groups to easily dismiss them. To stick with the original example, a notable sign of bias is trying to give the appearance of a balanced assessment by taking out the normal mortality rate. This accounts for a single, obvious objection giving the appearance of trying to do some real math, while leaving out much more significant issues with real skill levels and long term economic mobility, it simply assumes these immigrants will stay poor and that they have no skills.

There are plenty of other issues with additional information that I think would be necessary. What I can't get past though, is that this would be put up with such an obvious error in assumptions, proven wrong by information within the report itself, by a think tank. A politician's website I could understand but this is the kind of error you'd expect a freshman poli sci student to notice. It's unbelievable they'd let something that is such an obvious hack job go up. This sort of obvious mistake should be an embarrassment to anyone that is trying to be professional. A personal blog, sure, we say crazy stuff all the time. But this is paid work that an unpaid undergraduate intern should have been able to call the error on. Or, in this case, a guy sitting at home in front of his computer in pyjamas.

Tuesday, May 4, 2010

How Much Bigger is the State Really Getting?

It's pretty well accepted that government grows significantly with development. There's an actual theory behind this, though I can't remember whose it was. Anyway, what I've been musing on is whether the state has actually enlarged that much if you think of it in terms of disposable income rather than total GDP. After reading Braudel, something that really struck me is how much of income used to be devoted to simply staying alive. This percentage has declined massively with time and is continuing to do so. So if you think of the cost of government only in relation to the percentage of GDP left after the cost of the food, clothing, and shelter necessary for survival are taken out, is the state that much bigger of a slice of GDP than it was in earlier times when the simple cost of staying alive was a significant portion of GDP? Maybe the state actually occupies a fairly constant share of disposable income and it is disposable income that is expanding as we develop?

I'm sure someone has done these numbers, though I haven't seen them. Just something I've been musing on. Though if you really wanted to set about calculating this you'd need some way to deal with the changed role of medicine in daily life from the past and longer life expectancies. Still, might be an interesting angle to look at the state's size from.

Some Links On Supply Side Economics

Found this through Douthat's blog, Kevin Williamson from the National Review discusses supply side economics and how it is being misused. Good stuff.

What we also need though, is for conservatives to acknowledge that spending has a multiplier effect so if you cut it you'll also reduce revenues (and growth and GDP) so you won't get dollar for dollar cuts. And if you go wrong enough you may see an absolute decline by more than the spending cost, though instances of this are trivially rare and would be pushing too far.

On the other side, the left needs to acknowledge that tax cuts do spur revenue growth and that the multiplier effect is often rather lower than they'd like to believe. Of course, I do think most on the left knows that tax cuts can spur revenue growth so maybe I should be more precise and say they need to acknowledge that you can only tax the rich so much more before you start cutting investment. I could also add acknowledge the need for dealing with the deficit and entitlements but I think the message has been received here as well, even if there is no panic yet.

Then, now that we're all one big happy family, we can start having a serious conversation about the long term balance between taxation and what we want for our money. Maybe even a frank discussion about the role of the state. And then maybe we'll all live in a utopia able to give every little girl a pony. Or something.

It's Not Just the Limits but Also the Functions of Policy

David Brooks has a good column in today's NY Times that discusses the limitations that policy has and the importance of more diffuse cultural factors. I'm going to skip over the cultural stuff, we've come a long way since Weber and getting into this would get jargony if I'm going to address it right. Suffice it to say that I think there is something there but there are a lot more threads to pull out than just talking about Chinese or Swedes.

What I did want to address though, is that while I like anyone discussing policy limitations, I think you need to add in what policy does well to give a complete picture. David Brooks puts it like this:

The influence of politics and policy is usually swamped by the influence of culture, ethnicity, psychology and a dozen other factors.

I don't think this gets it quite right. It's not so much that policy gets swamped by other factors, though this is sometimes the case, it's that we have a bad habit of trying to do things through policy policy can't do. It's not a genie in a lamp that can address whatever we don't like in our society.

Simply pointing out the state's limitations gets things somewhat wrong since it simply makes the state seem ineffectual. This isn't the case, the better frame is to acknowledge that the state doesn't always have the capacity to change the things we wish it could and it also has some capacities some of us would rather wish it didn't. The first step to developing good policy is to sort out which problems policy can address, and which are outside its power. This is something we do far too rarely.

Monday, May 3, 2010

If Arizona Can Go Crazy Over Immigration So Can New York

This being New York though, I define crazy as doing something that makes sense, which is certainly against trend here. Not a big shift, but there is now a "special pardon panel" (their words, not mine) that will review cases of legal immigrants facing deportation. A baby step in the right direction.

[Update: More Complete Article]

Book Review: Civilization and Capitalism Vol. 2

The Structures of Everyday Life
The Wheels of Commerce
15th - 18th Century
Fernand Braudel

In this volume Braudel focuses on trade, commerce, and industry. The volume contains more theoretical concerns than does the previous volume, more than I can do justice to here. As a bare outline this volume sets out to refine the distinctions set out in the first volume, especially that between the free market and capitalism, probably with a bit more focus on the free-market since I assume the third volume will focus more on capitalism itself.

The first chapter seeks to describes the mechanisms that allowed for trade in the era. It describes the system of fairs that long distance trade originally took place in as well as markets and the functioning of the stock exchange. It also deals with smaller scale topics such as early shops and pedlars.

The second chapter describes the functioning of markets. This chapter contains many interesting theoretical points. Briefly, it contains a description of trading circuits and long distance trade and tries to separate out the market from other activity. It takes up topics such as describing how production was sharply limited by supply constraints on agriculture and how demand is confined mostly to the wealth since the rest too poor to demand much else than food. He also gets into some discussion of the market as a distinct system separate from the act of exchange and examines some other theories of the market. Overall, a fascinating chapter that would take quite a bit of time to unpack fully.

The third chapter fully gets into the discussion of Braudel's conception of capitalism and in particular how it relates to production in this era. Partly, his task it to explain why capital fails to have the revolutionary effect that it would later on, though he does mention in the 2nd chapter that manufacturing production had increased 5 fold between 1600 and 1800 showing that manufacturing was more significant in the period than many believe (181). There is almost too much of interest here to relate, he discusses the origins of the term capital, discusses how capital is invested during the time, discusses various types of investments, classifications of manufacturing, etc. Some of the bits I found most interesting were that one reason for the low returns on capital was the high ratio of circulating to fixed capital in the era, wages and other costs simply consumed much of the investment making accumulation of productive fixed capital (which would also where out faster than that in the industrial revolution) far more difficult. The real profit was available in distribution and marketing, not in production. As a result of this, the state often had to play a larger role in production to attract capital, without a state role many enterprises could simply not be maintained. This is just one of many obstacles described.

Chapter four describes the primary functioning of capital, in trade and in credit. This chapter discusses the importance of the highly profitable long distance trade, other sectors of the economy represent vastly larger amounts of total production but the concentration of the most profitable sectors of the economy in the hands of a relatively small group has significant consequences for development. Here he also describe early organization of trade and capital, such as the development of partnership agreements and eventually corporations (I wish there was more detail here, I am particularly curious about the development of limited liability, here this seems to be a development of merchants forming new agreements, but surely the state played a role in allowing limited liability to replace infinite liability, this development is unclear). Capitalist behavior is also described as frequently inhibiting the functioning of the self-regulating market, capitalists seek to change the rules of the game and establish monopoly profits, either through direct manipulation of markets, collusion, or attempted control through the state.

Chapter 5 sets all this against the social background of society, described as a "set of sets." This chapter, like the others, covers a lot as well. In particular it describes the state and how it became all pervasive during the era. I felt this aspect deserved more attention than it got. Other interesting tidbits were the proliferation of unused labor (paupers and vagrants), resistance of lower part of economy to using paper while upper part preferred paper (including an example of someone who got rich trading specie for soldier's paper currency), and social mobility during the period. What was most interesting however, was that he describes Europe as containing five separate hierarchies that all co-existed, seigniorial (roughly ties between lord and peasant), theocratic, territorial state, feudalism proper (chain of lords all linked together but cutting across various states), and lastly the towns (464-465). This division persists to some degree throughout the period and plays a key role due to the capitalist class remaining below those with political power so their virtues are not resented for their privileges, the ideology of the day conceives social tensions more as an active class against an idle class and less in the type of tensions between rich and poor. There is a lot more I could go into.

I'll sum this up as Braudel sums up his volume, with a brief overview of what Braudel sees as the three key elements in the development of capitalism. First, the need for an expanding market economy as a necessary but insufficient condition, second the development of a society that gives capitalist preconditions (such as inheritance rules that allow for large accumulations and division of society into groups with some degree of social mobility) examples are Europe and Japan, and last is the long distance trading routes that make up the world economy (or world economies as he puts it, he sees them as developing and changing over time). I should also note this is an overall favorable, if often critical, view of capitalism. He frequently equates capitalism with speculation and gambling but also ultimately shows that China has a free market economy without capitalism and this fails to develop. The excesses, while real, are a necessary part of the process that gives rise to the modern world, and given the very low level of material life shown at the beginning of the period I have little doubt that this on the whole a positive development.

I haven't decided what next week's is going to be yet. I'm going to get a start on the next volume of Braudel but I've been reading these too fast to truly absorb so will take this last one a bit slower. I also want to do something more modern, too much history lately. I'm going to breeze through (I've read papers on several aspects of comparative policy, especially economics, taxation and trade, but never actually read a proper general textbook on the subject so figure an overview is worth getting, even if it is from 1990) a Comparative Public Policy textbook I've had sitting on my shelf for a few years (it got left at an old apartment of mine) but may try to finish something shorter and less boring to review.

Good Thoughts on Immigration from Cato@Liberty

I got the link for this from Douthat's blog, but I found I quite like the argument Griswold is making. He links through to some interesting data as well from immigration in the 1950s. What I don't like is the comparisons with prohibition, which appears in plenty of other places as well, which I think is distorting the point somewhat. While a semantic issue, the problem with the term prohibition is it continues the meme that this is a special case largely separate from other market issues. You wouldn't call it prohibition if the US government banned the import of cars. Why use a separate word for a few products? The self-regulating market imposes the same rules on us whatever it is that is being banned. This is of course assuming that a self-regulating market exists for the product being discussed, I think in the cases of alcohol and labor the evidence leans heavily towards this being the case.

Talking Sense on Oil

Great post on the Economist Free Exchange blog on the need to raise taxes on oil. The benefits of doing this are very well understood, as well as the political costs. I don't have a lot to add here, every argument in favor of raising these taxes has already been made and those that haven't been convinced won't be. I do think this particular disaster is way too small to have a significant effect on anyone's political calculus though.

Actually, I do have something to add. Drawing from Braudel, though he's hardly the only one to make this observation, society and the economy has a tendency to fall into a path-dependent stagnancy. The free market on its own does not stop this from happening, global trade has been around for a long time and often quite robust, letting it run on its own won't shock us out of complacency or lead to innovation. Our dependency on oil seems to be an example of how this stagnancy can set in even in a modern economy. It takes a shock, either government driven or driven by fundamentals, to get a society out of this sort of stagnancy. Since oil will eventually run out we're probably going to get hit with this shock either way. Our choice is whether we're going to let the government ease us into this, or have it hit all at once.

Review of UN Climate Panel Lacks Social Scientists

I'm always glad there's people out there willing to read the details of what is going on in every field. The NY Time's Dot Earth Blog today points out that the committee reviewing the work of the IPCC lacks any social sciences and rightly points out that some of the biggest problems of the IPCC has to do with its ability to assess the human element. That's what we study, I'm glad there are others recognizing the utility of these efforts. There's probably a lot more fields out there that could use more social scientists on staff, including those with political science degrees. More of this sort of criticism, please.

Messaging in Thailand

I need to diversify my sources, but this article in the NY Times on Thailand is again particularly interesting. The focus on messaging is an interesting take on the government's efforts. I'll have to get around to finding some information on how else the government is approaching this crisis. If messaging is a big part of the government's strategy I'm intrigued but while the article makes it sound like an important piece I'm skeptical it is anything more than a small piece of an overall strategy. Or the government is flailing blindly, which seems equally plausible.

Saturday, May 1, 2010

Why the Scientific Revolution Took So Long to Happen.

This is probably some unfair sniping. But if anyone is wondering why the scientific method is so essential to science, as well as why it took so long to happen, this article on the apparent "discovery" of Noah's Ark by a team of archaeologists, they're 99.9% certain they're right, shows something that probably closely resembles what quasi-scientific research may have looked like before modern methods. Without the scientific method you can still get progress through rigorous analysis, as this group does seem to be performing though from a scientifically flawed starting point, but without the method of scientific inquiry outside, unrelated concepts will prevent knowledge from being able to accumulate in a regular fashion and data cannot be analyzed in a meaningful way. This is just fun to point out as a modern example of what research probably used to look like before we had science. It also points out why we need science and these methods are a dead end.

Dynamic Markets and Immigration

I have stated before in a few places that I believe the balance between institutions (such as the state), the economy, and society shift in exactly how they fit together and what aspects of life they cover. Immigration gives a good example of this. Immigration is currently seen as being clearly within the role of the state. The state sets quotas and regulations regarding anyone that comes in and anyone that defies this is breaking the law. Simple. This works quite well with asylum seekers or people who simply want to move into the country for non-economic reasons, such as people moving because of politics or a Canadian snow bird sick of freezing their butt off. The state also retains power to control the access that immigrants have to other state resources, including citizenship.

However, the economic migration that is at the center of the immigration debate is something different. It is driven primarily by demand on the labor market. Few would dispute that if there is demand for something independent producers will produce more to fill demand. This is what's happening with immigration. It has been moved into the market and thus out of the non-market activities that are clearly under the control of the state.

Of course, the state does retain powers to regulate the market but the state does not possess powers to control it. There are innumerable examples of this, whether black markets in North Korea, those in the Soviet Union, my example of the illegal fashionable, or the smuggling in early US history. If the state tries to impose non-market controls on a market, you simply get black market activities as the state is circumvented. There are a distinctly different set of tools available to the state to regulate markets than the state uses to regulate non-market activities. Failure to make this distinction and to apply the wrong tools results in policy failure whenever it is tried.

What we're seeing right now with immigration is this sort of policy failure. Since the state cannot control the market directly it resorts to indirect measures in the vain hope of imposing the same control on a market that it can impose on non-market activities. What is going on now at the border is no different from increased naval controls that earlier societies used to prevent contraband from reaching their shores. These measures may limit it slightly, but not anywhere near the extent desired by the authorities and at the cost of creating very powerful criminal groups as well as contempt of the law and the loss of all the potential revenue if legal channels had been allowed to function. No amount of state power can completely destroy a market once created, the choice is between a legal, regulated market and an unregulated black market outside of state control. Turning immigration into a non-market activity that is within the state's power to control absolutely is outside of the state's power. Any successful immigration policy will have to accept this or be subject to inevitable failure as all earlier policies have been.