Following up the follow-up

Following up on Joseph's latest, I actually think the problem here is more James Stewart than Paul Ryan. Ryan's budgets have been fairly obvious attempts to form a more Randian union. That's not surprising coming from an avowed follower of Ayn Rand. Ryan also comes from a Straussian tradition so I'm not exactly shocked that he would try to sell proposals that are likely to increase the deficit as a path to fiscal responsibility.

But that's OK. The Ryan plan is exactly the kind of bad idea that our national immune system ought to be able to handle. Liberals should savage its underlying values (Rand is always a hard sell); centrists and independents should spend their time pointing out the endless ways that the numbers don't add up and the evidence contradicts the basic arguments; respectable conservatives should damn it with faint praise or simply avoid the topic. The Republicans would then come back with a new budget, hopefully a proposal based on valid numbers and defensible assumptions, but at the very least one that obscures its flaws and makes a cosmetic effort at advancing its stated goals.

For Ryan's proposals to maintain their standing as serious and viable, the system has to have broken down in an extraordinary way. Specifically, the centrists such as James Stewart have had to go to amazing lengths to make the budget look reasonable, up to and including claiming that Ryan intends to take steps that Ryan explicitly rules out (from James Kwak):

Stewart is at least smart enough to realize that a 25 percent rate is only a tax increase if you eliminate preferences for investment income (capital gains and dividends, currently taxed at a maximum rate of 15 percent):

“Despite Mr. Ryan’s reluctance to specify which tax preferences might have to be curtailed or eliminated, there’s no mystery as to what they would have to be. Looking only at the returns of the top 400 taxpayers, the biggest loophole they exploit by far is the preferential tax rate on capital gains, carried interest and dividend income.”

So give Stewart credit for knowing the basics of tax policy. But he is basically assuming that Ryan must be proposing to eliminate those preferences: “there’s no mystery as to what they would have to be.”

Only they aren’t. Stewart quotes directly from the FY 2012 budget resolution authored by Ryan’s Budget Committee. But apparently he didn’t notice this passage:

“Raising taxes on capital is another idea that purports to affect the wealthy but actually hurts all participants in the economy. Mainstream economics, not to mention common sense, teaches that raising taxes on any activity generally results in less of it. Economics and common sense also teach that the size of a nation’s capital stock – the pool of saved money available for investment and job creation – has an effect on employment, productivity, and wages. Tax reform should promote savings and investment because more savings and more investment mean a larger stock of capital available for job creation.”

In other words, taxes on capital gains should not be increased, but if anything should be lowered.

These distortions aren't just journalistic laziness or rhetorically overkill on Stewart's part; it's essential to a narrative that writers like Stewart have built their careers on.

Here's Paul Krugman:

But the “centrists” who weigh in on policy debates are playing a different game. Their self-image, and to a large extent their professional selling point, depends on posing as high-minded types standing between the partisan extremes, bringing together reasonable people from both parties — even if these reasonable people don’t actually exist. And this leaves them unable either to admit how moderate Mr. Obama is or to acknowledge the more or less universal extremism of his opponents on the right.

The point about self-image and professional selling points is remarkably astute and when you combine those with the decline in fact-checking, diminishing penalties for errors, and a growing trend toward group-think, you get a journalistic system that loses much of its ability to evaluate policy ideas.

And for a democracy that's a hell of a loss.

Follow-up to Mark

There is a good follow-up to Mark's post yesterday here.

The central issue is that the Ryan budget only works if you can find a huge number of tax expenditures to remove and/or enormous cuts in the budget.  Removing all taxes on capital gain plus dropping the rate on the top tax bracket is an extreme change in the historical structure of the United States government.

Now, I have no trouble with people arguing for their ideas as to what is an ideal form and structure of government.  But I do think that both sides should be really transparent.  When I argue for single player health care, I try to be enormously transparent with how dramatically it would impact current providers (and how it would change the relation between patients and physicians).  I also suggest what I think might work as ways to mitigate these issues.

But the idea that dropping the top tax rates and setting the capital gains tax rate to zero would increases taxes paid by the ultra-rich only makes sense if there is a tax expenditure that can be targeted.  What that tax expenditure is should be the center of the debate now.

But it sounds like this has got to be one heck of an interesting plan.

Inventing the (original) reasonable Republican

This passage from Paul Krugman about the need to invent reasonable Republicans these days reminded me of something:

What’s going on here? The defenders of Ryan come, I’d argue, in two types.

One type is the pseudo-reasonable apparatchik. There are a fair number of pundits who make a big show of debating the issues, stroking their chins, and then — invariably — find a way to support whatever the GOP line may be. There’s no mystery in their support for Ryan.

The other type is more interesting: the professional centrist.* These are people whose whole pose is one of standing between the extremes of both parties, and calling for a bipartisan solution. The problem they face is how to maintain this pose when the reality is that a quite moderate Democratic party — one that is content to leave tax rates on the rich far below those that prevailed for most of the past 70 years, that has embraced a Republican health care plan — faces a radical-reactionary GOP.

What these people need is reasonable Republicans. And if such creatures don’t exist, they have to invent them. Hence the elevation of Ryan — who is, in fact, a garden-variety GOP extremist, but with a mild-mannered style — to icon of fiscal responsibility and honest argument, despite the reality that his proposals are both fiscally irresponsible and quite dishonest.

The idea of having to invent a politician to fit a need is not a new one. Thanks to an old LP my father had, I grew up listening to one of the most memorable takes on the subject.



* Had Krugman been willing to speak ill of a fellow New York Times writer he probably would have linked to this.

Social Darwinism

John Chait brings up an interesting point:

I happen to think "social Darwinist" captures the prevailing Republican philosophy pretty well. The point of the label, created by historian Richard Hoftsadter, is that a species of laissez-faire economics treated the market the way Darwinians treat natural selection — as the sole natural and correct mechanism for distributing rewards.

I think that this line of thinking fits well into the paradigm of the "magic of markets".  However, markets are man-made constructs and suffer the flaws of all such systems.  For example, it is unclear that there is such a thing as a true free market without issues of fraud (because regulations are subject to capture by political forces) or force (because how do you fund police without taxes).  Once you have a mixed economy, there are inevitably going to be winners and losers based entirely on who gets to develop the rules and who starts off with advantages.

Going back to a state of nature involves either starting from scratch (which nobody appears to be actually proposing) or trying to unwind a harrowing history of inappropriate use of force/fraud (just ask the First Nations about this issue).

Given that, I honestly do not understand the opposition to mixed economies. 

According to Snopes.com, four out of five bills have traces of cocaine on them

That factoid came to mind while reading the last paragraph of the passage below:

Knutson was working at the Fryn' Pan in Moorhead, Minn., when, according to her attorney, Craig Richie, a woman left a to-go box from another restaurant on the table. Knutson followed the woman to her car to return the box to her.

"No I am good, you keep it," the woman said, according to the lawsuit.

Knutson did not know the woman and has not seen her since, Richie said. Knutson thought it was "strange" that the woman told her to keep it but she took it inside. The box felt too heavy to be leftovers, Ritchie said, so she opened it -- only to find bundles of cash wrapped in rubber bands.

"Even though I desperately needed the money as my husband and I have five children, I feel I did the right thing by calling the Moorhead Police," Knutson said in the lawsuit.

Police seized the money and originally told Knutson that if no one claimed it after 60 days, it was hers. She was later told 90 days, Richie said. When 90 days passed, Knutson was still without the $12,000.

Police told Knutson the money was being held as "drug money" and she would receive a $1,000 reward instead, the lawsuit states. Lt. Tory Jacobson of the Moorhead police said he could not disclose much information about the case because it is an ongoing investigation.

"With turning this money over to us, we initiated an investigation to determine whose money this is," Jacobson told ABC News. "The result has been a narcotics investigation."

Police argue that the money had a strong odor of marijuana and therefore falls under a law that allows for forfeiture of the money because it was in the proximity of a controlled substance, the lawsuit states. But there were no drugs in the box and Richie said he believes this law is not being used correctly.

Salmon follows up on Groupon

Essential reading if you've been following the story.

Assumptions

I was reading this post by the usually amazing Jodi Beggs about contraceptive coverage in health care.  I was especially struck by the underlying assumptions in this point: 

Since it's mainly a subjective matter, I'm in no position to evaluate moral right-versus-wrong here. I am in a position, however, to point out a critical flaw in the argument. In order for the pro-mandate argument to hold, it must be the case that women are not in a position to choose their employers, their schools or whatever other institutions may be providing them with health insurance. As a woman, I find this assumption to be absurd and more than a little insulting. Since women are free to choose the employers and schools that are best for them, those women who prioritize free access to birth control can seek out institutions that offer that benefit.

If women behaved in this way, employers and schools would have an incentive to offer contraceptive coverage to their female employees. These incentives would come not only from the fact that birth control is likely cheaper than the corresponding amount of prenatal care and maternity leave, but also from the fact that the institutions offering coverage would have a wider pool of applicants to choose from. Of course, some institutions might refuse coverage on ethical grounds, but they would either have to offer higher compensation to make up for it or accept the fact that its female applicant pool is going to be limited to those women who either don't care about birth control or can't get another job or school acceptance letter. (Economists call these outcomes "compensating differentials" and "efficient sorting," respectively. I call it "voting with one's feet.")

I think that there are two assumptions that are made implicitly with these types of arguments that don't necessary hold.  The first, and most critical one, is that labor markets are reasonably tight and that it is easy to change jobs.  Back in the late 1990's that seemed like a realistic assumption.  Today, with unemployment hovering around 10%, that seems far less likely. 

The second assumption is that health care is a free market, which is definitely is not.  Have you ever tried to acquire an antibiotic without a prescription?  Or had to pay the (much higher) uninsured rates for medical visits and procedures? 

If employment is fluid then voting with one's feet might be a realistic option.  If health care was a free market then one could simply rebalance one's expenditures.  But when a market is not ideal, the second best outcome can actually be far from the theoretical ideal.  In this case, the regulation of benefits is trying to deal with two problems that we have: a hyper-regulated health care market and a high unemployment rate.  Now there may be good reasons for these problems (the alternatives could well be worse). 

But the idea of free labor market mobility is not the experience of the median worker right now (in the sense that changing jobs may well be a non-trivial issue). 

Sharks in a kiddie pool

This story from PRI's the World connects nicely with some posts I'm trying to get around to about the appropriate scale for different research projects. Some are well suited to small, entrepreneurial approaches (like this). Others demand major commitments from governments or large corporations (or both). If we want to encourage technological development, that's an important distinction when we get down to individual cases. For example, the prize model makes more sense when dealing with the first than when dealing with the second. (and yes, I am thinking of this.)

Now back to the sharks:

Stroud, 38, used to work fulltime as a chemist in the pharmaceutical industry. Then, in the summer of 2001, he and his wife went on a cruise to Bermuda.

“We hit bad weather, and we were trapped in a cabin, and on the news was shark bite after shark bite,” he says. “It seemed like everyone that stepped in the ocean in Florida was getting attacked by a shark that summer.”

That’s when his wife suggested he turn his talents to developing shark repellents. When they got home, he set up several kiddie pools in his basement, and he filled them with small sharks.


Field assistant T. J. Ostendorf holds a lemon shark in a seaside pen at Bimini Biological Field Station. The shark is turned upside down to induce a sleep-like state called tonic immobility. A repellent is considered effective if it can rouse a shark from this state. (Photo: Ghinwa Fakhri Choueiter)
He watched how the sharks fed, swam, and behaved. Then, one day, he accidentally dropped a large magnet from his workbench. He noticed some small nurse sharks dart away.
“That night, we put magnets into the tank and couldn’t believe [that] the nurse sharks were just extremely distressed and stayed away from them,” he says.

Stroud had discovered that magnets repel sharks.

A thought about Libertarianism

I was reading a series called Monster Hunter International.  One of the interesting themes in the book is that a private corporation (the Monster Hunters) are doing a better job than the government at dealing with the creatures of the night.  The books are extremely well written escapism and I definitely enjoy reading them.

But I noticed one interesting element.  Despite the dislike of the government by the monster hunters, the business plan requires the government to offer extremely large bounties (often in the hundreds of thousands of dollars) to hunters who kill a monster.

So this hyper-libertarian scheme only works when the government is willing to infuse it with cash.  I notice that the same thing was true of the Old West -- another libertarian example.  Here the government offered resources through mechanisms like the homestead act.

This does two things.  One, the increase in resources makes hard work extremely rewarding.  Coal miners ended up in Unions despite huge amounts of hard work.  That is because a life-time of hard work results in few rewards ("another day older and deeper in debt").  In the homestead scenario, hard work leads to a land-based legacy for one's family.

Two, this makes it viable to simply move on.  If your neighbors are insufferable then you can just try your luck somewhere else.  Look at how frequently western figures like Wyatt Earp moved around the West.  If you can just set up stake somewhere else, leaving is easy.

So maybe this philosophy is better in good times?  I wonder if we'd worry about inequality, for example, if wages were rising for all social classes?

Will reading OE make you rich?

OK, I'll admit that a lot of people saw this coming.

"The nation's most densely populated urbanized area"

This report from the census department highlights as aspect of the urbanization debate that tends to be overlooked (or worse):

The Census Bureau identifies two types of urban areas: “urbanized areas” of 50,000 or more people and “urban clusters” of at least 2,500 and less than 50,000 people. There are 486 urbanized areas and 3,087 urban clusters nationwide.

The nation's most densely populated urbanized area is Los Angeles-Long Beach-Anaheim, Calif., with nearly 7,000 people per square mile. The San Francisco-Oakland, Calif., area is the second most densely populated at 6,266 people per square mile, followed by San Jose, Calif. (5,820 people per square mile) and Delano, Calif. (5,483 people per square mile). The New York-Newark, N.J., area is fifth, with an overall density of 5,319 people per square mile. (See sortable lists.)

Of the 10 most densely populated urbanized areas, nine are in the West, with seven of those in California. Urbanized areas in the U.S., taken together, had an overall population density of 2,534 people per square mile.

The New York-Newark area continues to be the nation's most populous urbanized area, with 18,351,295 residents. Los Angeles-Long Beach-Anaheim is the second most populous (12,150,996), followed by the Chicago area (8,608,208). These areas have been the three most populous since the 1950 Census, when urbanized areas were first defined; however, at that time, Chicago was the second largest. Los Angeles became the second most populous urbanized area in 1960, and the order of the top three has not changed since.

Take into consideration the fact that this is an earthquake prone region where much of the land consists of mountains and canyons that are poorly suited for construction and these numbers become even more remarkable.

California remains in rough shape

The source of this quote is a father of two and Iraq war vet who works for the Atlantic council:

In addition to the barbarism that is our penitentiary system eating away at the basic principles on which we founded our society, our obsession with locking away people for violating arbitrary rules is destroying our human capital. We’re literally choosing locking up drug offenders over investing in our children. That’s madness and it has to stop.

Of course, the author is talking about the state of California (which has been very explicit about making this decision).  At some point I think we need to get over our fetish for incarceration.  The same article points out that the 1980's had a quarter of the rate of incarceration that we do today (comparable to a high crime European country, like Poland).  It is hard to decide what is a reasonable target for absolute rates, but going back to the levels of the early 1980's (and the top levels in Europe today) seems like a reasonable goal.

How we get there is unclear, but it seems like a priority for those of use who argue about education reform.  After all, a huge drop in prison costs (in addition to reducing human suffering) would free up funds to rehabilitate the school system.  It is challenging to increase quality while reducing funding.  But increasing available resources can only help (either directly by changing allocations inside state budgets or indirectly by reducing tax rates).

The rise of DC

Aaron Renn:

So we have New York entrenched as America's first city, and Washington, DC increasingly its new "Second City." Los Angeles, which seems to have never quite recovered from the early 90s defense draw down, and Chicago with its 2000s malaise, seem to be the victims of DC's rise. Another loser is Boston, which has seen its status as a financial hub decline and whose Route 128 corridor of tech, having first lost out to Silicon Valley, now appears to be losing out to NYC.

The rise of Washington, DC as a major growth center is not ideal.  This suggests more reliance between the Federal Government and growth than I would like.  I am far from a libertarian, but if access to government decision-makers is this important (enabling DC to rise above Los Angeles, Boston, and Chicago) then we need to consider if that is a good thing.

A programming question relating to board games

Specifically hexagonal games. I'm trying to write out concise descriptions (almost pseudocode) of some games played on hexagonally tiled board. Something like this checkers variant:

If these were rectangular tiles, the coordinates would be obvious, but with hexagons, I'm not sure which way to go.

Any suggestions?

Exciting academic career opportunity

Remember that Washington Post op-ed about all those great community college jobs with excellent pay and almost no work? (Sure you do, I talked about it two posts down) Well, the school the writer used as his main example has an opening in statistics so I'm sure some of our readers would like to get a resume in.

Business Statistics - Part-time Faculty(

Job Number:

0021Q)

Description

Business Statistics - Part-time Faculty – Germantown Campus

The Montgomery College, Germantown Campus, is currently accepting applications for possible openings as apart-time faculty member teachingBusiness Statistics courses. We are seeking an enthusiastic and dedicated teacher who exhibits a high degree of professionalism, a strong commitment to our students, and demonstrates the ability to motivate and educate in an engaging manner.

Montgomery College accepts applications for Adjunct/Part-time Faculty on a continuous basis.

Applications may be reviewed periodically based on the student enrollment needs.

• The listing of a course in the schedule of classes as “TBA” does not constitute an assignment.
• The hiring decision for part-time faculty involves an academic judgment and shall be determined at Management’s sole discretion.
• During the academic year part-time faculty at Montgomery College may teach no more than 11.5 ESH (equivalent semester hour) per semester and no more than 23 ESH per academic year.
• During summer part-time faculty at Montgomery College may teach no more than 10 ESH (equivalent semester hour) for both sessions combined.
• Compensation for initial salary placement as a new part-time faculty member at Montgomery College is currently $870.83 per ESH (Equivalent Semester Hour)