Tuesday, May 31, 2005

Politicians on Travel Regulation

Check out this article on the travels of politicians
Scrutiny of House Majority Leader Tom DeLay's travel has led to the belated disclosure of at least 198 previously unreported special-interest trips by House members and their aides, including eight years of travel by the second-ranking Democrat, an Associated Press review found.

At least 43 House members and dozens of aides had failed to meet the one-month deadline in ethics rules for disclosing trips financed by organizations outside the U.S. government.

These trips were not official government trips known as "codels," or trips by congressional delegations. The unofficial travel usually is financed by corporations, trade groups, think tanks, universities and others. They often pay for first-class seats on commercial flights or provide corporate jets for lawmakers.

Many trips combine speeches, seminars and fact-finding tours with golf, sightseeing, shopping and accommodations at first-class hotels.

The review of thousands of pages of records covered pre-2005 travel that was disclosed since early March. While most of the previously undisclosed trips occurred in 2004, some date back to the late 1990s. House Minority Whip Steny H. Hoyer, Maryland Democrat, recently disclosed 12 trips, the oldest dating back to 1997.
Rep. Ellen O. Tauscher, California Democrat, disclosed 21 trips. Rep. Luis V. Gutierrez, Illinois Democrat, reported 20 past trips, and Rep. Elijah E. Cummings, Maryland Democrat, reported 13.

Republican and Democratic House members violated the rules nearly equally by failing to disclose their personal trips within 30 days after the trip's completion. There were 23 Republicans, 19 Democrats and one independent, who were months or years late in their reporting to the House public records office.

Staff members for House Minority Leader Nancy Pelosi, California Democrat, disclosed 11 prior trips, while staff members for Mr. DeLay disclosed four. Rep. John Linder of Georgia, a former chairman of the House Republican campaign organization, belatedly filed nine trips, as did Rep. Maxine Waters, California Democrat.

The volume of unreported trips surprised the former chairman of the House ethics committee, Rep. Joel Hefley, Colorado Republican.

"I didn't realize the extent of the problem," Mr. Hefley said. "There is no particular sanction [for tardiness] if you come back and file. They get lax. They don't think about it."

A spokesman for Mr. Gutierrez said the seven-term lawmaker did not know of his obligation to file the required travel disclosure reports.
Do you suppose many lawmakers dislike having their behavior watched and regulated just about as much as we do (when the watch and regulate our choices)?

Social Security

There are two views on social security reform in the Washington papers. Here is some of what can be found in the Washington Post :
President Bush's congressional allies on Social Security are limping into the week-long Memorial Day recess, battered by public opinion polls yet hopeful that a rising awareness of Social Security's long-run financing problems will propel a legislative solution.
The Washington Times says:
Most likely voters continue to support President Bush's proposal to let younger workers invest some of their Social Security payroll taxes through personal accounts, a new survey finds.

The poll by independent pollster John Zogby for the Cato Institute, which is being released today, found that when voters understood the benefits of personal investment accounts, including a better financial rate of return than the current system, the Bush plan was supported by 52 percent of Americans and opposed by 40 percent.

"The thing that is compelling in this poll is that this is the response you get when you use a positive approach on Social Security reform," Mr. Zogby said. "If you use the 'Chicken Little, sky-is-falling' approach, then voters understand that something has to be done, but don't see the connection between personal accounts and fundamental reform of Social Security.
And, there's a commentary by Michael Tanner at Cato:
How many times during the recent debate over Social Security reform have you heard someone refer to Social Security's "guaranteed benefit"? The AARP says "Social Security is the guaranteed part of your retirement plan." Nancy Pelosi, the Democratic leader in the House, touts the system's "guaranteed retirement benefit." The liberal activist group ProtectYourCheck.org, headed by former Clinton chief of staff Harold Ickes, is running ads calling Social Security "a guarantee you earned."

But Social Security benefits are not guaranteed.

They are not guaranteed legally because workers have no contractual or property rights to any benefits whatsoever. In two landmark cases, Flemming v. Nestor and Helvering v. Davis, the U.S. Supreme Court ruled that Social Security taxes are not contributions or savings, but simply taxes, and that Social Security benefits are simply a government spending program, no different than, say, farm price supports. Congress and the president may change, reduce, or even eliminate benefits at any time.
Our system of political economy is surely a wonder. Some say social security is a guarantee, virtually an individual right. Others point to Court opinions and say social security offers no such guarantee, no such individual right. Some say that according to polls people don't like "the Bush plan," and others say that according to polls people like "the Bush plan." Public policy debates are characterized by vast differences in the perceptions of what is reality, what is true, and yet our system of political economy works. I wonder.

Thursday, May 26, 2005

Political Business Cycles

Bryan Caplan discusses a recent article on political business cycles. Here is one interesting finding:
After going over a lot of data, they bluntly report:
It is clear that election outcomes are more strongly correlated with short-term GDP growth than with long-term GDP growth.

In fact, it is hard to statistically improve on a simple model in which voters care only about income growth in the last two quarters before the election.
My thought is that if you think of voters as generally being rationally ignorant and myopic, then this statistical finding may not be too surprising.

Professor Kmiec on Judicial Filibusters

Professor Kmiec's commentary on judicial filibusters is worth a read.
Almost any nominee for the Supreme Court who is serious about observing the original understanding of the Constitution and a restrained judicial role can be expected to be caricatured as "out of the mainstream" and trigger the Democrat's "extraordinary circumstance" pretext to filibuster anew. . . . .

It is my view as well that the political fight over judicial nominations is primarily over how judges view their role in interpreting the Constitution.
The compromise does nothing to address the wrongful refusal of the Senate to perform its proper "advice and consent" function. Worse, it purports to forfeit freely authority reserved by the Constitution to the president — namely, his carefully articulated power of nomination.
The job of occasionally weeding out patronage appointments was never intended to invite the Senate's own crass politics. The Framers especially wanted to avoid legislative bargaining that would ignore the intrinsic qualities of each candidate — or as Hamilton put it — the sentiment that says "give us the man we wish for this office, and you shall have the one you wish for that." Hamilton's words resonate hauntingly since the filibuster compromise does just this: Give us Brown, Owen, and Pryor, but not Kavanaugh, Boyle, etc., or presumably, the next three Supreme Court draft choices.
I think it is very important to take careful note of the following:
If comity required some bipartisan agreement or statement, better it should have been an admission of complicity. Anyone critical of the filibuster for denying the entire Senate its constitutional role should also be honest. Democrats were the first to deploy the filibuster in a grand way against the judiciary, but both parties had a myriad of alternative ways in which presidential nominations were prevented from reaching the floor at all. All these practices should be condemned as constitutional defaults. The default comes at the sacrifice of accountability, or what is popularly termed transparency. Filibusters denying full-floor action or bottling up nominees in committee both dangerously, as Hamilton warned, "shut up in private [and make] impenetrable to the public eye..." the judicial-selection process.
In my view this in one of the most important considerations when looking today at the Senate specifically, and our republican government more generally. It is not clear that our elected representatives these days value public debate in the chambers of the Senate and the House. It appears that our Senators prefer to hide behind a cloture vote, or behind a "hold," or behind a "blue slip." It appears that they are quite comfortable hiding their choices from the public's view because they choose to avoid open debate on matters that seem of some controversy. It seems quite important to me that if there is controversy over a judicial appointment, then the Senators should be on record in debate on the Senate floor explaining the reasons they will cast their vote as they do. Even an "up-or-down" vote is not enough when the question is controversial. It is certainly unacceptable for the choices of the Senators to be hidden on matters controversial. It is also unacceptable for Senators not to state clearly, and publicly, the reasons they vote as they do on matters controversial. I trust our system of republican government works best when this happens, and that our system is depreciated, greatly over time, when Senators hide their choices and their reasons from public debate.

Back to Professor Kmiec:
The pragmatic defense of the filibuster was that it would supposedly yield consensus or "mainstream" judicial appointments. Obviously this remains implicit in the compromise that allows the filibuster's return whenever Democrats feel the "extraordinary" urge. In truth, the filibuster is just a political veto designed to preserve judicial outcomes that have no anchor in constitutional text. When a minority of the Senate can delay or obstruct a fully-capable nominee by reason of partisan or ideological disagreement, "factions," as Madison called them, have taken over and will erode the independence of the judiciary.
. . . .Where our fundamental charter wanted a super-majority, in overriding vetoes or impeachment, for example, it clearly provided for it. The framers specifically considered and rejected in the 1787 convention a 2/3ds Senate concurrence for judicial appointments.

Wednesday, May 25, 2005

Filibuster 14 & Median Voters

On O'Reilly Factor last night Dick Morris suggested something I found intriguing. He suggested that the agreement between the Filibuster 14 is like the creation a new 3rd party in the Senate. He suggested that if the agreement holds, this "new party" can control the Senate with the result being the accomplishment of Social Security Reform and other reforms he thinks are really what the American people really want.

The reason this idea is intriguing is related to the idea that the 7 Republicans and 7 Democrats are (perhaps) people whose policy views put them in the center of the political spectrum. I'm reminded of the median voter model which predicts the outcome of majority voting will be determined by the preferences of the median voter. Is it possible that a 3rd party would emerge around the median voter?

Tony Blankley seems to see the Filibuster 14 much the same way as Morris, except the implications he sees are not so positive:
Well, it would seem that the Senate has been placed in to receivership by 14 self-appointed trustees, several of whom are among the Senate's most wanton exhibitionists. Some of these ladies and gentlemen can be seen almost daily preening in front of television cameras confessing their moral superiority over their colleagues by virtue of their lack of firm convictions and their unwillingness to be team players.

Ironically, they have just formed the most exclusive club in the Senate. . . .
Let no one assume that this little assemblage of selfless senators will limit the reach of their writ to the matter of judicial appointments. As if one couldn't guess, on Monday night Sen. Lindsey Graham — the Tom Sawyer of the Senate — looking all twinkly eyed and mischievous into the television camera, promised that the wonderful 14 would soon be announcing their plan to reform Social Security. Tomorrow the World!

So begins the Regency Period of the Senate. As long as these fourteen stick together, nothing can pass the Senate.
Morris sees potential for accomplishments that would not otherwise have happened, while Blankly emphasizes nothing being accomplished. Perhaps we should also take note that Blankly's commentary points out that Senator Graham has already pointed to being able to accomplish Social Security reform.

Over at Captain's Quarters, Captain Ed also seems to take the negative view on the Filibuster 14:
Now we have a situation where our hard-fought majority has completely dissipated, to be replaced by a board of trustees that have arrogated leadership to themselves without even consulting the members of their caucuses, especially those in the GOP. And as Blankley points out, they have no intention of giving up that power as long as they can stay united. They intend on delivering Lindsay Graham's Social Security package and forcing it down the Senate's throat, complete with tax increases and an abandonment of privatization and ownership of one's retirement funds, despite a similar system for Congressmen and Senators that far outperforms Social Security. What other deals have they cut in secret, back-room negotiations? We will soon find out.
Let's add one more point of view to this mix from Glenn Reynolds:
. . . . Americans, for the most part, don't share in the reflexive hostility to religion found in the upper reaches of journalism and the academy. On the other hand, Americans don't like self-righteous busybodies -- whether of the PC left or the religious right -- telling them how to live, either.

There's a relatively small group -- under 20% of the electorate, I'd guess -- that would really like to recast American society under far more religiously determined lines. That's enough to steer the Republican party to disaster, as a similar group has done for the Democrats, but not enough to win elections much. The Democrats' problem, of course, is that they're even more dominated by their fringe than the Republicans, and the fact that the media establishment tends to share those views will make it harder for them to extricate themselves from this fix.
If both the existing political parties are moving farther to the extremes of right and left, which might be suggested by Reynold's comments, could we see a new party emerge from the realm of the median voter?

Tuesday, May 24, 2005

Liberals, Race & History

More Sowell
Black educational achievements are a special inconvenience for liberals because those achievements have usually been a result of methods and practices that go directly counter to prevailing theories in liberal educational circles and are anathema to the teachers' unions that are key supporters of the Democratic Party.

Many things that would advance blacks would not advance the liberal agenda. That is why the time is long overdue for the two to come to a parting of the ways.

Amending the Constitution

I was reading Cass Sunstein this morning and ran across:
Many of the Court's most celebrated decisions, even those striking down legislation, reflected the views of current political majorities.
And this:
Note that I am not attempting to defend the Court's decisions. I am simply remarking the fact that they are far less countermajoritarian than is often claimed.

These quotes are part of his discussion of the point that
the meaning of the document [Constitution] changes over time, and these changes usually arise from alterations in social values.
I think the idea is that the Supreme Court has in fact changed the meaning of the Constitution over time, and that even so, these changes have reflected changes in social values as reflected in current political majorities. It seems to me Professor Sunstein is not concerned by the Court's changes to the Constitution. I am.

Consider what our written Constitution says about changing it:
The Congress, whenever two thirds of both Houses shall deem it necessary, shall propose Amendments to this Constitution, or, on the Application of the Legislatures of two thirds of the several States, shall call a Convention for proposing Amendments, which, in either Case, shall be valid to all Intents and Purposes, as Part of this Constitution, when ratified by the Legislatures of three fourths of the several States, or by Conventions in three fourths thereof, as the one or the other Mode of Ratification may be proposed by Congress. . . . .
It seems to me that according to our written Constitution current political majorities are not supposed to be sufficient to amend the Constitution. The Constitution requires a super-majority of both houses of Congress, and then a super-majority of the states as well, before the Constitution is amended.

Isn't there something important about the super-majority requirement? I think that requiring a super-majority means that amendments to our actual written Constitution will be much more likely to be in the interest of most people, relative to a simple majority requirement. Just imagine getting 2/3 of the Senators to agree today on a proposed amendment to the Constitution. Right now the Senate cannot even get 3/5 of the Senators to support ending debate on one judicial nomination. What kind of proposed amendment could get the required 2/3 affirmative votes? Wouldn't the change have to very likely be in the interest of most people? A similar set of questions would apply to getting 3/4 of the states to ratify something, given the distribution of states between democrats and republicans.

While Sunstein may be correct in saying the the Court's changes to the meaning of the Constitution were consistent with current political majorities, my guess is that only a few of the Court's changes would have be supported by the super-majorities required by our written Constitution. Do you agree?

Are your comfortable with our written Constitution and the super-majority requirements to amend the Constitution? Or do you think we should see if we can amend the Constitution to require only a simple majority vote to approve proposed amendments? Would you consider amending the Constitution to allow the Supreme Court to amend the Constitution by a 5-4 vote, assuming that the Court sees its role as representing only changes in social values when it does so?

Monday, May 23, 2005

Filibuster Obstacle Course

The point made here by Jacob Sullum on www.reason.com echoes some of the ideas passing around in my head about the judicial filibuster. To me, it is the difference between the real world working of Congress and our idealistic view of what they would otherwise be doing.

I'm inclined to state that every judicial candidate should be put to the floor and voted upon using the existing rules of the Senate. Forget about the filibuster, the nuclear option and all the rest of this partisan bickering. But then I think if the Senate weren't gridlocked on this, they would most likely be voting for additional ways to spend my money or give it someone else and suddenly it doesn't seem so bad they are stalled out.

oh, and the hypocrisy on both sides of the aisle on this is positively sickening. Republicans hurling comments at Democrats, Democrats claiming they are doing this to preserve promises all the while pretending they have never been on the side trying to get rid of this practice.

Ain't Democracy grand? ;o)

Yellow Dog Contracts

I was just reading an author explain that among other things the Wagner Act outlawed yellow dog contracts. A yellow dog contract was a contract by which employees agreed not to join a union. Some employers would require such contracts with employees as a condition of employment. The author seemed to support the idea that Congress was right to have outlawed such contracts.

My sense is that there is nothing wrong with such contracts, and that Congress should not have been allowed to outlaw such contracts. It seems to me that we generally believe government has the power to prohibit actions that harm the person or property of others. This power is often referred to as the police power. So, I assume that members of Congress thought they were acting to prevent harm to others when they voted to outlaw yellow dog contracts.

I can see no harm to others with such contracts. A yellow dog contract would be a voluntary agreement by employer and employee. Given the voluntary nature of the agreement by both parties, I cannot understand saying either party was harmed. Yet, I would guess that those who supported prohibiting such contracts said they did so to protect the employee. But, by prohibiting the yellow dog contract Congress uses the coercive power of government to harm the employer who would otherwise not want to hire an employee who was a union member or who would become a union member after employment. On the one hand, there is no harm because the employment contract is voluntary for both employer and employee, and on the other hand government's coercion harms the employer. It seems that we should not want Congress to prohibit yellow dog contracts because its coercion acts to harm rather than to prevent harm.

A second reason for concern about this sort of Congressional prohibition is that generally government action to prohibit something, say theft, is thought to be an exercise of the police power. It seems to me generally accepted that the police power is a governmental power which was reserved to the states by the 10th Amendment. I don't think we should allow Congress to prohibit behavior in general because Congress is not supposed to have been granted the police power when the Constitutional was ratified.

Workers Externality Victims? Just Say No To Externality Abuse

Don Boudreaux discusses a couple of cases that I tell students are illustrations of externality abuse. Here is the link found in the above comment to his second case.

The case that involves Wal-Mart moving to town and older businesses in town going out of business is surely not an externality source of market failure. If it were, then competition in general would be a source of market failure. On the contrary, the Wal-Mart case is an illustration of the very process by which we believe market competition moves economic activity toward efficiency. My favorite definition of externality is: an unintentional, nonmarket, interdependence. The Wal-Mart case cannot be a source of externality market failure because the interdependence in question occurs through the market process.

The case of workers desiring more leisure time also involves a market interdependence. Further, it is an interdependence chosen by the workers themselves. An externality is an effect of economic activity that is external to the market. The choices of employers and employees are not at all external to the market.

This is not to say that when we consider either of these issues that we may not discover inefficiency. It is only to say that we don't have externality sources of market failure to worry ourselves about. Instead, I suggest we should be looking for sources of government failure. Wouldn't government policy that restricts the number of hours a worker can work annually be a likely source of inefficiency? Efforts to argue that the government policy is correcting an externality is turning the entire concept of efficiency upside down.

Many times Wal-Mart moves into a town completely through the voluntary choices of individuals. But, also there are many times that local government is asked prevent Wal-Mart from moving in. If government agrees, this would be a source of government failure, not a source of externality market failure. I believe there are also many times that local government actually subsidizes (or bribes some would say) Wal-Mart to move into town. Such government actions would be a government failure, not an act to correct a market failure.

Unfortunately, policy analysis today seems over-run with such illustrations of assertions of market failures that aren't. Of course, this is bad enough, but the situation is seen to be much worse when it is realized that such abuses of the externality concept often mask the true source of inefficiency which is government failure.

As I often tell my students: JUST SAY NO TO EXTERNALITY ABUSE!!!!

Friday, May 20, 2005

Illegal Immigration, Wages, Minimum Wages

Bryan Caplan uses supply & demand to discuss minimum wages and the impact of illegal immigrants. His discussion is interesting and informative.

Thursday, May 19, 2005

Must Read Speech

I think Professon Gaddis has given a must read speech. You can find a transciprt right here.

Congressional Beef Speech

Russell Roberts has discovered what's for dinner.

I'm riding in my car this morning and I hear this ad for beef on the radio. The voiceover is a quintessential cowboy voice. It sounds just like Sam Elliot, the guy who played "The Stranger" in "The Big Lebowski." He's talking about the primal experience of cooking meat on an open fire and then eating it. The ad ended this way: "Beef—it's what's for dinner. Funded by America's beef producers with Chekhov dollars."

Read the rest .

Exploitation & Social Justice

Social justice
"refers to the overall fairness of a society in its divisions of rewards and burdens."
I find it difficult to understand what "social justice" is supposed to mean and why this concept should be seen as the basis for a normative theory of the purpose of government. It seems that most often those who "fight for social justice" (I recall Senator Kerry suggesting that his faith leads him to fight for social justice) are advocating that the purpose of government is to redistribute income and wealth so that social justice can be achieved. My difficulty in understanding this normative theory of government is that I see government redistribution in general as government using its coercive power to take from Mutt to give to Jeff, and that generally seems unjust to me. I suspect that the advocates of social justice see government as correcting an injustice that is the result of exploitation, and that when our system of political economy is under the social justice microscope the idea is that our system is, by its nature, characterized by exploitation.

But, then, I've got to say I don't think I understand what exploitation means. I think I tend to be suspicious of the term because it is often used to condemn market exchange which I see as involving voluntary behavior in general. I don't think exploitation, of a worker for example, can be claimed when the situation called exploitation occurs because the identified exploited individual voluntarily chooses to be in the situation under review. I suspect that in general, there can only be exploitation if there is coercion. That leads me to this question: Can there be exploitation without the coercive power of government being behind the person who exploits others?

Truth Is Worse Than Fiction

Conventional politics is an unending argument about Haves and Have-Notes. Are the Haves getting more? Is it too much? Why isn't there more sharing with the Have-Nots? The Have/Have-Nots argument works to completely obscure another discussion: the Nows and the Laters. We're the Nows; our children and grandchildren are the Laters. Decade after decade, the Nows have taken from the Laters. Unfortunately, this fiscal child abuse, like the psychological kind, is hard to spot. But measure it we can, and measure it we will using a relatively new method, called generational accounting. Doing so leads to the following bottom line: Unless we adults make very large sacrifices very quickly, our kids will face lifetime net tax rates that are twice those we face!

That caught my attention. How about you? This comes from The Coming Generational Storm by Kotlikoff and Burns. I've decided this book is the first on my summer reading list. Perhaps I will have more posts on this book later.

Tuesday, May 17, 2005

More Sowell

Sowell on democrat politics.

I just don't think Sowell can be read too often.

Kondrake on Social Security

Mort Kondrake has an honest description of the democrat's recent approach to the Social Security reform debate. Even President Clinton seems to be advising a legitimate debate.

Monday, May 16, 2005

Social Security: It's Back

Can you hear that beat in the background? Look out I think it's a land shark: Democrat Readies Plan on Social Security.
Rep. Robert Wexler (D-Fla.) says that by imposing a 6% tax on wages above $90,000, to be paid half by workers and half by employers, the government could raise enough money to solve Social Security's financial problems for 75 years.
How can we end such disception?

I've posted several comments on Social Security already that help explain why Wexler's proposal is a really bad idea and why it is disception. Look here and here .

Congressional Spending

Congress's Latest Christmas Tree Bill Can anyone tell me by what power granted Congress in Article I, Section 8 of the Constitution, Congress claims to be able to spend on the?
children's museums
Ford & Packard museums
bridges
a garage on a University campus
sidewalks
landscaping
horse trails
parking facilities
bike paths.

Friday, May 13, 2005

Senator Reid

Senator Reid discusses confidential FBI file on the Senate floor:
"Henry Saad would have been filibustered anyway," Mr. Reid said on the floor yesterday, about the Michigan Appeals Court judge who is nominated to the U.S. Court of Appeals for the 6th Circuit.
"All you need to do is have a member go upstairs and look at his confidential report from the FBI, and I think we would all agree that there is a problem there," Mr. Reid continued.
Would I stretch my commitment to individual liberty too far to suggest Senator Reid's comments are a severe abuse of power in that his actions yesterday signficantly abridge Judge Saad's individual rights? After all, discussing the contents of confidential files in public is serious enough, but it may also be the case that Senator Reid doesn't even have the authority to review such a file.
Republican aides pointed to Standing Rule of the Senate 29, Section 5: "Any Senator, officer, or employee of the Senate who shall disclose the secret or confidential business or proceedings of the Senate, including the business and proceedings of the committees, subcommittees, and offices of the Senate, shall be liable, if a Senator, to suffer expulsion from the body; and if an officer or employee, to dismissal from the service of the Senate, and to punishment for contempt."

Furthermore, a "Memorandum of Understanding" covering the use of FBI background reports limits access to committee members and the nominee's home-state senators. Mr. Reid would fall into neither category.
Would you agree that his actions yesterday in the Senate show little respect for the liberty rights of others? Perhaps it's time for Senator Reid to look for another job?

Privately Provided Public Goods

Economists generally teach that it is difficult for voluntary individual behavior to be successful in the provision of public goods. Perhaps such difficulties can be overcome with technological change. Consider this suggestion of assurance contracts. Be sure to check on the link to fundable.org.

Mancur Olson has discussed the ability of organizations to provide themselves with public goods, and he has developed the implications of the difficulties in doing so in terms of the success of economies over time. I've mentioned Olson's work here and here. The idea is that for a group to be successful in providing itself with public goods, the group has to be able to either exert coercion and/or offer selective incentives to individual members of the group. So, it is expected to be difficult for large groups to successfully organize, but once organized large groups tend to persist. Among the implications are that over time a system of political economy can become sclerotic in the sense that an increasing number of groups within the system devote ever more money and resources to distributive activities at the expense of productive activities. As Olson explains in his book Power and Prosperity even economies that are as successful as we think ours is will fall short of the economy's potential, sometimes far short.

Question: If assurance contracts are practical and it becomes easier for groups to provide themselves with public goods, how will this effect the implications that are drawn from Olson's theories of groups and economies?

Thursday, May 12, 2005

Climate & Science

Check out Robert Davis on climate science.
Several things we thought we knew about the PDO we do not, in fact, know at all. The unprecedented great Pacific climate shift of the late 1970s linked to global warming was, in fact, precedented and unrelated to global warming. And the useful predictability of the PDO for predicting west coast drought may not be useful at all, since the PDO will, apparently on a whim, suddenly become non-periodic for centuries at a time (unrelated to global warming).

The biggest problem with all of these somewhat cyclical climate shifts is that no one knows for sure that a shift has actually taken place until many years AFTER the event, when it's too late to be useful. So be wary of global warming psychics warning us of unprecedented climate shifts -- in most cases, they are only unprecedented because of the short life span of most scientists. Remember one of the absolutely fundamental and too-often unstated tenets of science -- there's little point in studying anything that doesn't vary during a scientist's lifetime.
I point to this commentary, not so much because I agree with the basic analysis, but because I think it may be worthwhile to consider how we should approach incorporating science into political debate of alternative public policies.

Consider Davis's comment: "Several things we thought we knew about the PDO we do not, in fact, know at all." As I understand scientific method, science is best at finding out what we don't know. In order to be good at identifying what is not true, science recognizes by its very methodology that it is not able to identify what is true. Instead, science proceeds by the process of scientists thinking up hypotheses, making predictions, measuring the reality of interest, and comparing the measured reality against the predictions. If there is sufficient consistency, then the hypothesis is PROVISIONALLY accepted. The provisional acceptance of the hypothesis and theory continues until it is discovered that the theory is wrong. Of course it may never be discovered that the theory is wrong. In such an event would we conclude that the theory was, as a matter of fact, true? I don't think so. We simply continue to use the theory as long as it works for us. I don't think it is at all surprising, looking historically, that there are things science thinks it knew but later discovered it did not know. I think this is merely an inherent characteristic of science.

The question is, given this is an inherent characteristic of science, how should we utilize science when we discuss public policy issues that rely on what scientists think they know about something? It seems to me that most of our political debate in such cases proceeds as though science is telling us what is factually true. Isn't such a presumption inaccurate, and therefore, isn't relying on such a presumption a poor way to approach public policy debate?

Sowell On Walmart Wages & Busybodies

Tom Sowell explores the concerns of some that Walmart isn't paying employees enough.
Think about it: What the busybodies are saying is that third parties like themselves -- who are paying nothing to anybody -- should be determining how much somebody else should be paying those who work for them.
His commentary is well worth thinking about.

Sometimes I wonder why it seems so easy for some people to neglect the value of individual liberty. When it comes to government and the economy, why can't we just let people decide for themselves where to work, what business to own, who to work for, what wage to accept, what wage to pay, etc.?

Wednesday, May 11, 2005

Senator Salazar: Walking eagle

I had never heard the term "walking eagle" until the other day in class. What a clever term for those who are full of it. One such person is Senator Salazar who replied to my letters criticizing him for his support of the filibuster impeding a vote on judicial nominations. Here is his response:

Dear Tateum:

Thank you for contacting me regarding judicial nominations and recent calls by Senate Republican Leader Bill first to alter the use of the filibuster.

With regard to judicial nominations, I take the Senate's constitutional responsibility to provide advice and consent on judicial nominations very seriously and am committed to processing the President's nominees in a fair and judicious manner. This process should be collaborative, as it has been in the past. Federal judges are lifetime appointments, and our judicial system and the American people deserve to have judges that will be fair and competent. To that end, I want to assure you that I will thoroughly review the qualifications of all nominees that come before the Senate.

At the same time, I hold the standing rules and set of precedents governing the Senate in the highest regard. These rules protect the rights of the constituents of any Senator to voice their objections to matters that come before the Senate. I will exercise that right if I believe a bill or nomination is not in the best interest of Colorado and needs further discussion.

Again, thank you for contacting me on this matter.

Sincerely,
Ken Salazar United States Senator

This sounds like a bunch of $#@! to me. What do you think?

Walter E. Williams: How not to be poor

Avoiding long-term poverty is not rocket science. First, graduate from high school. Second, get married before you have children, and stay married. Third, work at any kind of job, even one that starts out paying the minimum wage. And, finally, avoid engaging in criminal behavior. If you graduate from high school today with a B or C average, in most places in our country there's a low-cost or financially assisted post-high-school education program available to increase your skills.
Professor Williams also offers instruction about not being poor.
The Children's Defense Fund and civil rights organizations frequently whine about the number of black children living in poverty. In 1999, the Bureau of the Census reported that 33.1 percent of black children lived in poverty compared with 13.5 percentof white children. It turns out that race per se has little to do with the difference. Instead, it's welfare and single parenthood. When black children are compared to white children living in identical circumstances, mainly in a two-parent household, both children will have the same probability of being poor.

The Rich

Professor Williams tells us about the rich in our country.
Farrah Gray was raised in a predominantly black Chicago neighborhood. At age 8, he started a lemonade stand business, later a venture capital business, a food business and a magazine. By age 17, Farrah Gray was a millionaire, had been chief executive of four companies, and had offices on Wall Street, and in Las Vegas and Los Angeles.

While becoming a millionaire by age 17 is rare, eventually becoming a millionaire isn't. According to TNS Financial Services' 2004 Affluent Market Research survey, there are an estimated 8.2 million American households with assets, excluding primary residences, worth over $1 million. That's a 33 percent increase over the 6.2 million millionaire households in 2003.

. . . .80 percent of today's American millionaires are first-generation rich. . . .fewer than 20 percent inherited 10 percent or more of their wealth. More than half never received as much as a dollar in inheritance. Fewer than 25 percent received "an act of kindness" from a relative greater than $10,000, and 91 percent never received, as a gift, as much as $1 from the ownership of a family business.

This points to one of the most unique features of our nation. Just because you know where a person ended up in life is no guarantee that you can tell where he started. In other words, there is so much economic mobility in our society that starting out with modest means or even being dirt poor does not prevent one from ending up at the top.

In Justice as Fairness: A Restatement John Rawls argues that one of the conditions for justice is that "social and economic inequalities . . . are to be attached to offices and positions open to all under conditions of fair equality of opportunity." It seems to me that what Professor Williams tells us about the rich in our system of political economy is a pretty good illustration of what "fair equality of opportunity" would mean in any real economy.

Monday, May 09, 2005

The Big Mac Tax

Hold on to your wallet in Detroit. The city of Detroit is apparently considering a special tax on fast food.
Faced with a $300 million budget hole, Mayor Kwame Kilpatrick is hoping people in this heavily taxed city won't mind forking over a few extra cents for their Big Macs and Whoppers.

Mr. Kilpatrick wants to ask Detroit voters to approve a 2 percent fast-food tax -- on top of the 6 percent state sales tax on restaurant meals. The mayor says consumers will barely notice the extra cents at the cash register. . .

If approved, the Detroit tax would be the country's first to target fast-food outlets. . .the tax would apply to anything sold at a fast-food restaurant . . .

"With Detroit, you're kind of grasping at straws because the tax base is so tapped into," Mr. Wassmer said.

Just how is 'fast food' defined? Besides the obvious chains like Wendy's and White Castle, officials have mentioned takeout pizza places and Detroit's ubiquitous chili dog restaurants known as Coney Islands. It's uncertain, however, where Starbucks or the corner deli would fall.
Is this a "fat tax," and is Detroit a nanny state?

Get out your little copy of the Constitution and look for the 14th Amendment. Can this fast food tax possibly be Constitutional? Think about it. The tax base here is not sales. The tax base here is the type of restaurant. The sales of hamburgers by an owner of a McDonalds will be taxed higher than the sales of hamburgers at the local brew pub. If you own a pizza joint and you have been letting customers take their purchased pizzas out to consume at home, then just stop sending your pizzas home and avoid the extra sales tax.

Legal Affairs Debate Club - Constitution in Exile?

The Legal Affairs Debate Club - Constitution in Exile? is complete. What do you think? I think Professor Barnett was the winner.

One reason for this conclusion is the resort to use of the word "radical" by Professor Sunstein. I don't find use of the word radical to make any sense when applied to ideas about individual freedom and individual liberty that were articulated by James Madison, "father" of our Constitution and one of our Presidents. The ideas referred to as "radical" have also often appeared in the texts of the opinions written by many different Supreme Court Justices. Professor Barnett's ideas about the meaning of our written Constitution are not at all radical. It would seem to me much easier to use the label "radical" for the belief that the words of our Constitution are not actually written in our Constitution.

Cafe Hayek: The Spontaneity of Spontaneous Order

". . .Freedom would be less appealing if when we chose, our choices couldn't be implemented or only implemented at great cost or with great delay. . . ."

"So when I marvel that the extended order of human cooperation. . .allows me to buy a dozen bagels for a brunch without having to call ahead, it's so much more than that. The greater marvel is that thousands or millions of us can make those changes and the system simply readjusts to our new desires."
Russell Roberts at Cafe Hayek has some interesting observations about spontaneous order.
"The weird part of this is that we teach our students that sudden, unanticipated changes in demand drive up prices in the short run as a way of signaling to economic actors where resources are most valued. But have we exaggerated the importance of the price mechanism? What evidence do we have that the actual prices rise very much in the face of large shifts in demand?"
He suggests that our language may constrain the way we think about and understand economic activity, and perhaps we are led to misunderstand economic activity for this reason. I suspect this is true in many ways, e.g. the way we often use the word "society" as though "society" had preferences and could make choices. I wonder if an answer to his questions about the price mechanism might be suggested with a similar observation. It seems that most of what we economists think we know about the price mechanism is related to our static model of a market equilibrium. The real "price mechanism" is not static at all. It is truly dynamic. Even our dynamic models in economics tend to have a static character. Our economic models don't seem to depict an economic world that is truly emergent and evolving. As Russel Roberts makes note, true economic activity is often emergent. Perhaps, we do not understand the price mechanism and economic activity all that well because we use models that do not facilitate our understanding of economic activity as being emergent (rather than just in terms of a market equilibrium).

Thursday, May 05, 2005

Drug Prices

Doug Bandow writes
A council committee has approved legislation to create a new 'illegal trade practice' - selling drugs for more than city politicians decide is fair. The bill would allow Washington, D.C. to transfer the companies' patent rights to other firms through compulsory licensing.

It's a truly nutty idea.

I second that. Truly nutty.

Interest-Group Government

Jacob Weisberg discusses what he calls Interest-Group Conservatism:

In the late 1960s, the great political scientist Theodore Lowi coined the phrase 'interest-group liberalism' to describe an emerging system of government he viewed as untenable. In a classic book, Lowi argued that national policymaking had become theprovince of organized lobbies, which worked to the detriment of the overall public interest and spawned an uncontrollable, amoebalike federal bureaucracy.
. . . . .
In this, the third year that Republicans have controlled everything, a variation on the old interest-group liberalism has emerged as the new governing philosophy. One might have expected that once in command, conservative politicians would work to further reduce Washington's power and bury the model of special-interest-driven government expansion for good. But one would have been wrong. Instead, Republicans have gleefully taken possession of the old liberal spoils system and converted it to their own purposes. The result is the curious government philosophy of interest-group conservatism: the expansion and exploitation of government by people who profess to dislike it.
. . . .
The problem with special-interest conservatives is not that such agenda items violate their greater principles on any given point, any more than the policies promoted by Democratic interests violate liberal principles. Rather, it's that the entire enterprise of running Washington as a special-interest spoils system breeds a bloated, ineffective government . . . .

Mr. Weisberg's observation is no surprise to a fan of Mancur Olson who wrote: The Logic of Collective Action, The Rise and Decline of Nations, and Power and Prosperity.

Read the rest

Texas House to cheerleaders: Don't shake it!

reported on cnn.com this morning (click here for article) in yet another sign of how important football is to Texas, the state's House of Representatives approved a bill to outlaw sexy cheers and punish schools that allow them. Texas legislators would rather spend their time putting together ambiguous legislation about "sexually suggestive cheering" than spend time on important issues, like, I don't know - firing teachers and principals in Houston for cheating on the state's standardized tests?

How does one define "sexually suggestive?" Representative Al Edwards states that he doesn't have to define it - "but I'll know it when I see it" - partially quoting Supreme Court Associate Justice Potter Stewart's famous quote about obscenity.

My question - is there a job opening for monitoring the cheering? If so, I think I have found a new career path. ;o)

Wednesday, May 04, 2005

Legal Affairs Debate Club - Constitution in Exile?

A very interesting debate is in progress this week about the "Constitution in Exile."
To some, restoring the 'Constitution in Exile,' as Judge Douglas Ginsburg dubbed it in 1995, means having the federal courts encourage freedom. To others, it's the signature of a movement to roll back health, safety, and wage regulations to where they were 70 years ago, before the Supreme Court embraced the New Deal.
I'm not sure I get this idea of "having the federal courts encourage freedom." It seems to me the perspective of Thomas Jefferson that we are each born with certain "unalienable rights" is pretty much opposite the perspective of "encouraging freedom." That is, the role of government in general, and the Courts in particular, should not be thought to be encouraging freedom. Rather the role of government, and the Courts in particular, should be to protect individual freedom. I would suggest that of the three branches of government it is the Judiciary that is supposed to protect individual freedom from the innumerable ways the other branches of government can act to abridge our individual freedoms. I suggest the Constitution was written with limited government and with protecting individual liberty in mind, and that prior to the Supreme Court embracing the New Deal, the Court did quite often see its role as the protector of individual liberty.

The Social Security Trust Fund is Irrelevant

Let's make it more concrete with a personal situation that many people can relate to. Say you're planning to send your kid to college. You have ten years and think you need $100,000. In Scenario A, each year you put an IOU for $10,000 in a jar. At the end of ten years, you pour out the jar, swear a bit more than is proper, and then scramble to come up with $100,000, either through borrowing, selling assets, earning more, or spending less. In Scenario B, you skip the jar and IOU charade and advance to the final step: you swear and scramble. The IOU charade was irrelevant.
This is precisely what people need to know about the Social Security trust fund. It is a charade, and it is irrelevant to the debate about reforming social security. Read the rest here.

Tuesday, May 03, 2005

Global Warming: The Smoking Gun?

Dr. Roy Spencer has a comment on the recent research reported by Dr. James Hansen.
In summary, the recent study by Hansen et al. indeed presents one possible interpretation of the available evidence, but it is a very human-centric one that assumes that natural decadal- to century-scale climate fluctuations are not to blame for at least some part of what has been recently observed. Or, using the 'smoking gun' metaphor, it isn't yet clear whether mankind is the perpetrator, Mother Nature is an accomplice, or vice versa.

Sowell on Illegal Immigration

Thomas Sowell has a good commentary on illegal immigration.
There is a reason why illegal immigration is the third rail of politics. Not only is there a fear of losing the Hispanic vote, there is a fear of being demonized in the media and therefore losing other votes as well.
It does seem that he is correct, both political parties in Washington seem to be running from illegal immigration as fast as they can.
When you say that Americans have a 'right' to have their 'basic needs' met, you are saying that when people refuse to supply themselves with food and shelter, other Americans should be forced to supply it for them.

If you subsidize workers when they won't work and subsidize employers by making illegal aliens available to them, then under those particular conditions it may well be true that illegal immigrants are taking jobs that Americans won't do. But such statements conceal more than they reveal.

Professor Sowell is always good at cutting through the fog of politics.

Monday, May 02, 2005

War Over Intellectual Property

Mark Schultz discusses a very important concern, i.e. a movement internationally to weaken protection for intellectual property rights.
Proponents of this new international IP [intellectual property] agenda are deeply skeptical of the benefit of intellectual property rights. They assert that access to health care and knowledge are fundamental human rights. As they see it, private ownership of intellectual property violates these rights, making drugs too expensive and interfering with obtaining knowledge and educating people in poor countries.
If the concern is truly with the poor in developing economies, then weakening protection for intellectual property is likely to be the wrong move. In order to accomplish the development of new technology the appropriate economic incentives have to exist. If an individual cannot rely on being able to capture the benefits of developing new goods and services, then the incentives to undertake the requisite risky investment activities will be missing. Protection of intellectual property rights is the means of providing and of protecting the incentives to develop new goods and services.
Having a heart for the poor does not call for getting rid of intellectual property rights. We should stop treating the people of the developing world as victims, forever at the mercy of corporations and more developed countries. Yes, we should find ways to help the poor with the needs of the moment. That short term poverty, however, does not mean that they cannot help themselves to prosper. But to do so, they need the same institutions that have helped the people of developed nations to fulfill their potential: The rule of law and private property rights, including intellectual property.

Sunday, May 01, 2005

Nuclear Brinksmanship

Gene Healy at Cato Institute has interesting commentary about the Senate. By rule every bill must be read in its entirety on the Senate floor, unless there is unanimous consent to stop reading the bill. Thus, it would be very easy for the Democrats, or any member of the Senate, to "shut down" the Senate.
Bringing the Senate to a crashing halt will hardly scare those of us who believe that no man's property is safe while Congress is in session. In fact, there would be something perversely entertaining about C-SPAN programming dominated by the monotonous recitation of 700-page agriculture bills. If only the senators could be forced to sit and listen. The Intelligence Reform Bill of 2004 is 236 pages long, and it's a safe bet few senators read it in its entirety. McCain-Feingold clocked in at a mere 36 pages, yet in February 2003 The New York Times reported that the Democratic and Republican party organizations had to hire high-priced lawyers and consultants to run seminars teaching senators and congressmen about the requirements of the law they had just passed. 'I didn't realize what all was in it,' Rep. Robert Matsui (D-Calif.) said. A breakdown in Senate cooperation would lead to a period of blissful inactivity, and could help educate the public about the increasingly incomprehensible statutes Congress calls 'laws.'
"I didn't realize what all was in it." I can understand not sitting in your Senate chair to listen to the reading of a bill, but is it really wise to admit you're an elected representative and you don't "realize" all your are voting for or against?

Public choice economists explain rationally ignorant voters and the nature of the system of politics that can result. Now Representative Matsui seems to illustrate that elected officials in a republican form of government may choose to be rationally ignorant as well. If Republicans succeed in getting Senate votes for all judicial appointments, perhaps their next rule change should be to require reading all bills in the Senate, no exeptions. It may be hopeless to think Senators and Representatives would be informed about the bills the vote on, but perhaps it would be be the case that more time reading would lead to less time enacting.