The Capital of Crony Capitalism

Oh yes, it’s definitely D.C., now the richest metropolitan area in the U.S.  And in case you were wondering, here’s the cause:

D.C.’s prosperity reflects a parasite economy that battens on wealth created by others. We live in a vast, metastasizing tick of a city, swollen on the lifeblood it drains from the body politic.

Why did I move to the D.C. area again?  Oh yeah, I’m supposed to help keep this from happening.  I feel so productive…

One Way to Regulate an Economy

Don’t like the way a particular sector of your economy is evolving… say taxicabs in DC, for example?  No problem:

  1. Ban all licenses for new taxis.
  2. Later, lift the ban on just things you need, like handicap-accessible taxis.
  3. Oooh, lift the ban on stuff you like too, like green taxis.
  4. When you have the exact proportions for your desired economy, stop.

What could go wrong?

If this works, I say we ban all food, then just lift the ban one government-approved cuisine at a time.

Was Byzantium’s Tax Code Byzantine?

Apparently calling the U.S. tax code “byzantine” is an insult to Byzantium:

Was Byzantium’s tax code Byzantine? Not at all. Byzantium’s two-pronged system would have made Steve Forbes proud. There was a flat tax on all citizens. Farmers paid an additional tax based on the size and quality of their land and their annual production. While the equation was straightforward, putting it to work was not. The Byzantines used alphabetic, rather than Arabic, numerals that were notoriously difficult to crunch.

More about calling things “byzantine” from Slate.

The Hypocrisy of Trusting the Market, Ever

Read Matt’s post about mandating the number of parking spots at a barber shop, then read the comments.  According to the commenters, apparently the logical way to think about regulation is as follows: if a regulation exists, then there must be a conceivable acceptable justification for said regulation — that if not apparently obvious, only remains unearthed because of shoddy journalism.  Therefore, stop picking on the government.

I’ve rarely agreed with Matt over the years, but I do believe he’s a serious thinker.  One of the things I’ve found really disheartening about reading his blog over the last few months is how much crap he takes from his commenters whenever he suggests any one little thing that might not be an appropriate use of government regulation.

Of course, serious thinkers also tend to have a contrarian streak, so perhaps the disagreements will push him more libertarian  :)

The Budget Problem, Explained

I don’t know about you, but I’ve never had any trouble wrapping my mind around the U.S. budget problem or the available solutions — I simply scale the national debt figures as if they were for an individual household, and all becomes clear.

Let’s assume the U.S. government is an average U.S. family — the Joneses — earning the median household income of $52,000.  Last year, the Joneses spent $85,000.  To make matters worse, the Joneses are currently holding $337,000 in debt, of which $80,000 is the interest alone.

The Joneses aren’t sure exactly how they’re going to balance the budget for next year.  Mrs. Jones thinks they should cut back on lottery tickets, and Mr. Jones is thinking about asking his boss for a 30% raise.  Probably they’ll compromise eventually by buying only half their normal number of lottery tickets and asking the boss for a 20% raise.  If the boss is extremely generous, the economy improves, and advances in technology mean the HDTV they intend to buy will be $100 cheaper, they’ll probably end up earning $62,000 and spending $75,000 next year.

Note that, even if we assume that Mr. Jones can extort his boss for a raise at gunpoint (which he could if we keep the analogy consistent), his company only generates $350,000 or so in annual revenue, most of which has to go to normal business operations or the whole thing will fold.

Let’s say you were advising the Joneses on their financial situation.  What would you tell them to do?  Personally, I’d buy them a copy of Dave Ramsey’s book, black out the title with a magic marker, and tell them it’s a copy of the Bible.

The First of Two Trips to the DMV

Five years ago, it took two separate trips of three hours each to the DMV to get my VA driver’s license, and this year I was determined not to let them get the best of me.  I blocked two hours off work during an off-peak afternoon at an off-peak time of the month.  I arranged to have a car available to borrow.  I checked online and saw that wait times were low.  I brought six forms of identification and four proofs of residency.  My visit lasted about 25 seconds and went something like this:

Security guard who opened the door for me: “What are you here for?”
Me: “Driver’s license renewal.”
Guard: “Not gonna happen.  Come back tomorrow.”
Me: “Why not?”
Guard: “Computer system is down.  Come back tomorrow.”
Me: “Do you think there’s any chance they’ll get it back online?”
Guard: “Hell no, it’s been down since 8:30 this morning!”
Me: “Don’t you think it would have been helpful to post that somewhere so–”
Guard [cutting me off]: “Come back tomorrow.  Maybe you’ll have better luck then.” [starts a new conversation with another guard]

I’ve blocked off Wednesday morning for my second visit, and had to reschedule a dental appointment to find that time in my calendar.  This time, I’ll probably have to rent a zipcar or take a bus to get there.  And if it doesn’t work out, I’ll have a cool 48 hours left (counting my birthday) to renew before my license expires and I’m subject to retaking the driving exam or some other nonsense.

:(

One Reason I Hate Politics

Or, to be more accurate, one reason I don’t respect partisans who believe party loyalty is some sort of virtue.  Radley’s analysis certainly corroborates what I’ve seen as well.  The “if only I could get elected/re-elected/everyone who agrees with me elected/my party returned to power/a filibuster-proof majority/the other guy’s party discredited to the point that their ideas aren’t even part of the debate, then I can really start doing good things for the world” is a special kind of schizophrenia associated with people who respect parties more than ideas.

Death Penalty PR

In reading about the Utah prisoner who’s due to be executed and chose the firing squad, I was fascinated by this:

Utah is phasing out firing squads because of the media attention and bad image they cause, legislators and corrections officials said.

It was in Utah in 1977 that Gary Gilmore was executed by firing squad, which he chose over hanging. His case became notorious, not only because it was the first execution in the nation after a 10-year legal hiatus, but also because he insisted on being put to death rather than pursuing appeals. “Let’s do it,” he famously said just before his death.

In 1996 in Utah, John Albert Taylor became the only other prisoner in recent history to be executed by firing squad. The event attracted hordes of reporters who often, to the chagrin of Utah officials, invoked images of raw, frontier justice. Mr. Gardner’s execution, if and when it occurs, appears certain to attract similar worldwide attention.

I don’t know much about how the shift from firing squad and electric chair to lethal injection came about politically, but I suspect it was a bootleggers and baptists-style coalition of government officials who wanted less public attention on the executions and death penalty opponents who wanted to eliminate punishments they deemed to be more cruel.

If I’m correct (and people who have studied this more than I are welcome to challenge my hypothesis), then it seems like the government let PR trump purpose here, since their argument in favor of capital punishment entirely hinges on its effectiveness as a deterrent. Setting actual cruelty aside for a moment, it seems to me that the government would want to favor the maximum appearance of cruelty it could get away with, if it cared at all about the effectiveness of capital punishment as a deterrent.  But the above excerpt suggests the more cruel the punishment appears, the more politically infeasible capital punishment becomes, putting the government in the awkward position of defending its use as a deterrent while simultaneously hoping no one notices it’s happening.

So here’s my question for opponents of capital punishment: would the best strategy not be to favor executions with the greatest public appearance of cruelty, in hopes of turning public opinion against capital punishment?  With apologies for slipping a utilitarian calculus into my argument, wouldn’t the difference in actual cruelty between firing squad and lethal injection (assuming the data bears out a significant difference) be worth the PR gain if it led to the abolition of capital punishment?

Seems to me like the effort to make capital punishment less cruel has only made the issue less salient and therefore less difficult for opponents to get state legislators to outlaw it.

The Futility of Measuring HCR

I really do appreciate the sentiment of these analyses — now that the health care legislation has passed, it seems like we should test the hypotheses of health care proponents.  If even their most conservative predictions bear out, that might well be an argument to support other policies that are presently contentious.  If their predictions turn out to be a colossal overstatement, they should eat crow and we should look for a better way.

The only problem with asking proponents of this bill to relocate their money in the direction of their mouth is this fundamentally misunderstands what just took place.  For the vast majority of the ground troops, the calculus wasn’t that x billion over x years is okay if it saves x lives and reduces the debt by x percent.  The calculus was either “universal enrollment good, costs be damned” or it was “Democrats good, Republicans be damned.”  Everything else was daily talking points to persuade independents.

Libby puts it another way:

Supporting health care reform is kind of like turning your twitter avatar green, or having one of those Jesus fish or Free Tibet stickers on your car; it’s supporting a cause that you think is righteous, without personally doing or sacrificing anything. Much like an audience at a play, you know how you expect events to play out morally and logically, and when reality agrees with your expectations – math and finances be damned – you’re happy and you feel like justice has been served. If not, then a great injustice has occurred, the nation is ungovernable, the other team is being underhanded and deceptive, and the world is going to hell in a handbasket.

Don’t believe me?  Ask yourself how many ardent supporters of this bill would have backed off if the CBO estimate had come back a trillion dollars higher.  (Many ardent supporters lamented that the bill wasn’t expensive or sweeping enough, you will recall.)  And I’m not even trying to pass moral judgment here — maybe achieving universal enrollment or Democrats beating Republicans really are victories worth limitless cost.  I don’t think so, but I suppose I could be mistaken.  I’m just saying that, short of actual catastrophe, I don’t think ardent supporters would care one bit if the figures they cited in order to get the bill passed turned out to be horribly incorrect.  The bill passed, end of story.

That Entitlement Feeling

I know many people are uninsured and suffering through no fault of their own.  It’s certainly not all of them — plenty are uninsured by choice and will now be saddled with a mandate — but it’s many of them.  I truly hope they get the relief they’ve been praying for, because that’s the most obvious benefit of this bill.  Now that the bill has passed and there’s no turning back, I really do hope that ten years from now there are families who will be able to say that it made their lives better.

And I do believe that will happen.  Do I know how many people will be better off?  Not a clue.  Do I think it will make enough people better off, and to a great enough degree, that it’s worth the costs it will impose on the majority of Americans for decades to come?  I have no idea how to answer that question, at least not without some sort of a priori appeal to either egalitarian or individualist virtues, and now we’re in a moral debate.

I suppose I could attempt to weigh the costs and benefits, but it’s an incalculable exercise.  Sure, I’ve written several times about direct costs, but that’s an easy lie to expose to anyone willing to listen.  The bill won’t save us money over 10 years or 20 years or ever — if you actually believe that, you don’t understand economics or politics, and I’ll debate you any day of the week.

It’s incalculable because of the unseen costs, which few people on either side of the aisle are talking about.  A libertarian professor I know once said he believed that libertarianism’s greatest intellectual contribution is a recognition of the unseen.  We’ll never see what open competition could have done to health costs in markets for health care left free of government interference.  We’ll never see how the voluntarily uninsured would have spent the money they’re now required to spend on plans.  We’ll never see how many lives could have been saved or how much healthier we could be in a world with technological innovations that are more costly and burdensome to develop as a result of government.  I’m not saying there will be no technology and no innovation, I’m saying when we make these choices “as a society” we sacrifice the unseen what-could-have-been for a “bird in the hand is worth two in the bush” philosophy that defies the most basic tenets of economics.

I know a cautiously optimistic public intellectual who says we’re going to get freer and more prosperous only because the pace of human ingenuity will always outpace government’s ability to stifle it. It’s a sad irony that government’s inefficiency relative to individual entrepreneurship is precisely what allows it to impose huge burdens on society and come back later to say “see, things aren’t nearly as bad as you thought” thus paving the way for further intrusion.  There’s a seemingly endless debate between those who say “think what economic growth we’d have with less government” and those who retort “but without government, what makes you think we’d have growth at all?”  Except that thanks to politics, the debate is awfully one-sided in favor of a intervene-more approach.  Surveys of past presidents bear this out especially well: a few presidents deliberately did very little to get in the way of the people, and even where increased prosperity resulted, you’ll find those presidents sitting comfortably at the bottom of the popularity lists.

Do I think the world’s coming to an end because we have sweeping health care legislation?  Absolutely not — certainly not before 2014 (remember, the start date was pushed a few elections back for precisely the reasons you’d suspect) and probably not at all.  I simply have to believe that the more dismal predictions won’t bear out.  We’re certainly not going to get most of was promised, no question about that.  At the end of the day I suspect, as I do with most government legislation, that we’ll be much better off than the worst fears of the naysayers but much much worse off than we could have been in a world without it.  But because it’s unseen, no one will ever know.

The Real Arithmetic of HCR

A very good read in today’s Times.

I’ll say again what I’ve said before: although I disagree with you, if you want to support a really bad bill in order to lay the psychological architecture for a permanent entitlement program, or because you can’t bear the thought of the Democrats not winning this one, that’s your business.  But if you believe the bill is financially solvent, you are deluding yourself.

[Update 3/21/10: Not to mention another sobering reality: “this legislation would set in motion political forces that would make additional spending inevitable.”]

On Rewriting History

As you’ve probably heard, the Texas school board recently gave preliminary approval to a new social studies curriculum — changes that will potentially impact social studies and history curricula nationwide because Texas is one of the largest textbook markets in the nation.

Since January, Republicans on the board have passed more than 100 amendments to the 120-page curriculum standards affecting history, sociology and economics courses from elementary to high school. The standards were proposed by a panel of teachers.

“We are adding balance,” said Dr. Don McLeroy, the leader of the conservative faction on the board, after the vote. “History has already been skewed. Academia is skewed too far to the left.”

In short, the changes were made because the conservative majority on the board believes the curriculum proposed by high school and social studies teachers reflects their left-wing bias.  And the list of proposed changes is indeed radical — see here and here.

Here’s my take:

I have no trouble whatsoever believing that the current curriculum has a left-wing bias.  History professors are most certainly biased — they vote at least 7-to-1 Democrat, just one statistic in a mountain of evidence — and high school social studies teachers learned how to teach by taking lots of classes from history professors.

That said, McLeroy and his friends clearly have little interest in teaching an “unbiased” version of history.  There’s a big difference between tempering the unwavering enthusiasm for LBJ’s Great Society, or ensuring the gold standard is explained properly, and specifically mandating a Judeo-Christian chronicling of the nation’s founding.  There’s a big difference between reducing errors of omission and rewriting history to favor your own ideological persuasions.

Okay, so at least we can all agree on the problem — that both the teachers and the school board are biased — right?  Not exactly.  The Times, for one, reliably sticks its head in the sand on this point:

It was a disturbing intervention by the board’s Republican majority into educational decisions best left to the teachers and scholars who have toiled for almost a year to produce the new curriculum standards…. [Students] deserve to have a curriculum chosen for its educational value, not politics or ideology.

I do sympathize with the teachers, but my sympathy is more in line with Art Carden’s insights:

I would suppose that being a public school teacher in the face of such controversies is demoralizing because control of your classroom is in the hands of some far-off board or bureaucrat indulging the pretense of knowledge. Theirs is a fatal conceit for everyone involved: teachers’ hands are tied, students’ options are limited, and everybody loses. I know I would be demoralized if my syllabi were handed down from a College Board in Nashville or Washington, and I’m pretty sure our students would be demoralized if they couldn’t take their business elsewhere.

Maybe there simply isn’t any solution to the problem of bias in educating future generations of leaders, but Art alludes to a more practical solution: getting out of the business of mandated statewide curricula.  As Russ Roberts explains:

Of course it’s going to a political decision instead of the one that’s best for the students. But maybe just as importantly, it imposes a one-size-fits-all solution. So while I happen to like more Hayek, I’m sure there are many things I wouldn’t like about the Texas state schoool decision. But all parents are stuck with the state-wide decisions….  [I]nstead of competition among schools over what children should learn, it’s a top-down decision. Bad idea.

Although some people will be more than a little upset at the thought that someone, somewhere, might be learning social studies in a manner they feel to be harmful, it sure beats having a small and politicized group of people decide for students all across Texas (and the nation?) decide what’s in the best interests of all concerned.

When HCR Gets Really Scary

The Post reports on Nancy Pelosi’s comments Monday:

After laying the groundwork for a decisive vote this week on the Senate’s health-care bill, House Speaker Nancy Pelosi suggested Monday that she might attempt to pass the measure without having members vote on it.

Instead, Pelosi (D-Calif.) would rely on a procedural sleight of hand: The House would vote on a more popular package of fixes to the Senate bill; under the House rule for that vote, passage would signify that lawmakers “deem” the health-care bill to be passed.

The tactic — known as a “self-executing rule” or a “deem and pass” — has been commonly used, although never to pass legislation as momentous as the $875 billion health-care bill. It is one of three options that Pelosi said she is considering for a late-week House vote, but she added that she prefers it because it would politically protect lawmakers who are reluctant to publicly support the measure.

“It’s more insider and process-oriented than most people want to know,” the speaker said in a roundtable discussion with bloggers Monday. “But I like it,” she said, “because people don’t have to vote on the Senate bill.”

As of this writing, InTrade currently shows 77.5 on the question of whether health care will become law by the end of June, which is up considerably from Scott Brown’s election.  It turns out if you’re willing to skirt the 60-vote obstacle, ignore polling data, eliminate transparency, and risk getting your entire congressional representation voted out of office in November, a president really can bring people together to get things done in Washington.

HCR Memo

If Big Insurance hikes rates to raise momentum for your plan, it is unlikely your plan is bad for Big Insurance.

Hayek Much?

The Post on footpaths worn in the snow:

In Chevy Chase West, as one day followed another with no snowplow in sight, the footpaths running down the middle of every street became so well packed and clearly defined that visitors at times assumed a Good Samaritan with a snowblower had carved them out. That wasn’t the case, of course; the network was the collective accomplishment of hundreds of tromping neighbors, each wanting to visit the other or break out to Bethesda or Friendship Heights. There was something wonderfully mysterious about the emergence of such a well-formed network, almost as if the ghosts of pre-automotive trading trails had risen through centuries of pavement.

Hey Post, I have a book for you to read.  It works for more than snow!

Here, later, is the point of their rumination:

This being Washington, many naturally were ready to draw political lessons, and divergent ones at that. The natural disaster proved, once and for all, the necessity of government and the services it provides — or it proved, once and for all, the urgency of self-reliant preparation.

Um, the goverment was closed for four days.  No flights, no metro, no postal service.  Everything the government has a monopoly on, DC was not able to access at any price.  The government sucked this one up hard core.  Does the Post reeeeally want us to pass judgment on the necessity of government based on this week?