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Silver Linings

November 13, 2016

Trump’s drawbacks are extensive, and I was hoping he would not win the presidency. However, he has and America will have to live with the consequences, both good and bad. I am an optimist by nature, and amid the doom and gloom, I like to see the good things as well. This post is primarily targeted toward liberals, and to some degree progressives although they won’t agree with it.

Temperament
Trump has the best temperament. Yes, I know it was a laugh line when he said it but it’s true. He has the self control and determination of a sleep deprived two year old. He has the work ethic that only the silver-spooned lifestyle of someone born super rich can bring. This is a horrible temperament for someone on your side to have, but it’s a great temperament for your enemies to have. Trump will not work tirelessly for Republican goals. He’ll give up at the slightest setback and get caught up in petty feuds.

Climate Change
Trump has given a big F you to everyone hoping the government will solve global warming. Global warming activists will have to look elsewhere for a savoir, but they should have been all alone. The inconvenient truth is that the government isn’t good at fixing complex problems when different interest groups disagree on the fundamentals.

The scenario Democrats had put their hopes in was what, exactly? Pass a massive tax on gasoline, much higher CAFE, push out tight regulations on dozens of polluting industries all of whom are lobbying hard with an opposition party who doesn’t even believe the problem exists? Then once you’ve managed to get U.S. emissions down at least 75%, convince not only rich Europe, but also poor China and India to eviscerate their own growth to cut emissions too? Because it doesn’t work unless everyone, or darn near, does it together. All the while, each government is in a prisoner’s dilemma and is going to try to free ride off the efforts of the rest. Sorry, but governments aren’t up to such a challenge and they wouldn’t have been even had the Democrats won every election.

Instead, people will have to put their hopes in solutions that can be done without the government, which I believe was the better approach all along. Fund new solar panels, buy electric cars, come up with geoengineering technologies, etc. Technology has always been the only plausible way to solve global warming and now Trump has forced liberals to recognize that.

Russia
For all the “Trump will get us nuked” rhetoric, Trump has promised to get along much better with Russia. Sure, the Ukrainians are screwed. Sure, the Baltic States will have to put some serious thought into national defense. But the #1 threat to America getting nuked has always been Russia, ever since 1949. Clinton, not Trump was in the habit of poking the bear. A bear is a good symbol for Russia. You can’t be friends with a bear, but you sure as hell don’t want to be a bear’s enemy either. So it is with Russia. If Russia wants Crimea, ffs let them have it. Yes, it sucks for the Ukrainians, but it’s NOT worth risking the U.S. getting nuked. Yes, it sucks that Russia is bombing Islamic militias that the CIA was arming, but once again, it’s not worth the U.S. getting nuked over. Let them play empire. They let us play empire without interference. If they roll tanks into Germany, sure, maybe then we’ll get serious, but for countries that are no strategic value to the U.S., it’s simply not worth fighting Russia over. Trump will not mess with Russia unnecessarily. Clinton would have.

Civil Liberties
Democrats were against civil liberty abuses when George Bush did them, but as soon as Obama was in office, they were in favor. Republicans are always against them. So we libertarians are in a bit of a bind. When a Republican is in office, we have Democratic allies, so we want them to win, but as soon as they do, they switch sides and suddenly we’re alone. Having a Republican president, especially one as divisive as Trump means suddenly we’re not going to be the only ones against extrajudicial drone executions of American citizens, bombings of MSF hospitals, warrantless surveillance, etc. etc. Many of the things the media got its panties in a twist over Trump promising to do, either Bush or Obama have actually done. Obama did use drone strikes on the families of terrorists. Bush did use torture on prisoners of war. Both of them had the FBI spy on mosques without probable cause. Now at least we’ve got some allies.

Foreign Policy
Who knows what Trump will do. But we know what Clinton would do. Endless worthless pointless eternal war. Thousands of American lives and trillions of dollars thrown away year after year is a crusade that makes Americans less safe than we were before. The media attacked Trump for saying he was against the Iraq War before he was actually on record as against it, but at least he was against it at all.

Improve Parties
Both the Republican and Democratic parties got their butts kicked this election. Trump shows to Republicans that their voters don’t give a fudge about their platform. The Democrats will have to do some soul seaching, reconnect with voters, and find something they can sell that’s better that “we’re not racist”. There’s a good chance of a realignment. Hopefully libertarian ideas can find a home in the Democratic party now that the Republicans are the authoritarian party.

Ends idea that money buys elections
Perhaps the most pernicious misconception in all of political science. Money doesn’t win elections, but as long as politicians think it does, they will continue to throw the American people under the bus in favor of special interests so they can get money to buy campaign ads. It would be better for them to do a good job and have less campaign spending, and Trump perhaps is such a salient example that maybe they will on the margin.

Clinton
As much as I don’t like that Trump won, I’m pretty happy Clinton lost. She was an awful candidate in many ways. Just because Trump was worse does not in any way excuse her behavior. When she broke the law, her response was to send her husband over to the AG’s office and get them to drop the charges, then lie non-stop to Congress, the FBI, and the American people.

The Democrats used every dirty trick in the book to nominate her, even though she would likely have won the nomination without their machinations. This wound up sabotaging her because it’s ammo that Trump can use to undermine the legitimacy of her nomination as well as alienating the Democrats who were hoping for Sanders. If she has won fair and square, Sanders supporters would have supported her more enthusiastically. I also disagree with her on virtually every policy perspective out there. I could go on, but it would get tedious.

A few of Trump’s first batch of policies
Constitutional Amendment to impose term limits on all members of Congress;
Response: A bad idea, but probably never going to happen.

A requirement that for every new federal regulation, two existing regulations must be eliminated;
Response: Gimmicky, but not a bad idea.

Renegotiate NAFTA or withdraw from the deal under Article 2205.
Response: Ahh that wonderful wiggle word “renegotiate”. As long as Trump can get a few good concessions, hopefully he’ll leave the substance intact.

Withdrawal from the Trans-Pacific Partnership
Response: Inevitable. Anti-trade sentiment is ascendant and the deal itself was shrouded in corruption and secrecy.

Cancel every unconstitutional executive action, memorandum and order issued by President Obama
Response: lol, suck it blue!

Removing the more than 2 million criminal illegal immigrants from the country.
Response: This is why his base elected him. He HAS to do something about illegal immigrants, and contrary to the Clinton camp, wanting people to follow immigration law is not racist.  Because of his credibility on the issue, Trump may be the best person to do a real reform of our immigration system.  Trump married an illegal immigrant.  He’s from New York.  He’s spoken about the need for more high skill immigration.  He might not be that bad.

Suspend immigration from terror-prone regions where vetting cannot safely occur. All vetting of people coming into our country will be considered extreme vetting.
Response: More weasel words. The vetting system is already quite robust, taking about 2 years. Trump could add maybe 10% to it and claim to his base that it’s much better.

Where do we go from here?
First of all, don’t panic. Cthulhu is still swimming left. More Americans than ever before support gay rights, marijuana legalization, and Millenials are far more left wing than the dying Baby Boomers. Demographics are also on the left’s side. Trump did not win a majority of votes, just a majority of electors. This is not the new dawn of racism or xenophobia. Keep a close eye on Trump’s authoritarian tendencies. The only way for the left to lose long term is for democracy itself to be undermined. I’m reassured by the outpouring of people saying we need to relearn empathy, understanding, moderation, compromise, and American values. We can get through the next 4 years. America has had worse.

Rhetoric and Science

October 7, 2016

John David Duke Jr. wrote an article saying that scientists are merely dispassionate fact miners:

Should it ever be discovered that a Scientist, especially a Social Scientist, has lost his dispassion, or has even willfully departed from the Scientific Method, anywhere along the process, beginning with descending into the Data mine, extracting Facts, examining the Facts, and then snapping the Facts to The Truth, then let the dispassionate peers of that Scientist immediately banish him from Science

Although Duke couches his argument in absolutes, I interpret his article as advocating a set of cultural norms that scientists should adhere to, rather than a description of how things are. What should grown up scientists tell baby scientists about their role in society? Should they waste time talking about rhetoric, or biases, or hermeneutics? Hell no. Those things will just confuse the poor dears and subvert their unadulterated pursuit of Truth.

The culture of Science is a fragile flower. Humans are not inherently scientifically minded. The beast within thrashes against the Chains of Reason. We always want to form groups of like minded individuals, defer to authority, play status games, tout our own importance and greatness. We are humans, but we are playing at being more, and in order to achieve it, we need to tell ourselves lies about what we are doing. The Noble Lie of Science is that there are no Noble Lies. That there is Truth and there is Ignorance and you’re either on one side or the other. That’s why the “banish him from Science” line is so important.  Ironically, positing the existence of dangerous questions is the most dangerous question of all.  As a wise man once said, blessed is the mind too small for doubt.

Assorted Links

September 12, 2016

1. How politics went insane

2. The freedom lover’s case for the welfare state

3. Mr. Rogers and Advice columns

4 New Opiod isn’t addictive. Hopefully it’s also safe and effective.

5. Post truth politics.

Assorted Links

August 29, 2016

1. Political ads don’t work

2. The post-truth era

3. Inconvenient questions

The answers, btw, are:
Upgrade McCarthy.
FDR and Trump are similar and both are bad
Democrats should address the concerns of Trump supporters but that might not be compromise per se.
American history would have taken a better course if none of our Presidents had had significant authoritarian tendencies.

4. To what degree is the system rigged?

5. The world will get weirder.

Basic Income vs. Welfare

July 14, 2016

There is a lot of misinformation and unrealistic expectations about basic incomes/negative income taxes/universal incomes/guaranteed national incomes (I will call it basic income in this article, but all the terms above are equivalent). Basic income is not magical, nor is it radically different than other welfare programs.

How is it different from normal welfare?
The fundamental difference between a basic income and normal welfare is that basic income does not try to control the decisions of the poor. Basic income is not conditional. It does not stop if a recipient does not look for a job, is not disabled, gets a part time job, decides to spend the day writing, painting, or getting drunk. It consists of cash, allowing the poor to spend money how they see fit rather than trying to force them to buy particular things, such as healthy food or crappy apartments. Instead of getting food stamps, the equivalent money could be spent on food, or anything else the poor person wants.

It’s no surprise that basic incomes are popular among libertarians and left wing liberals. Libertarians don’t want the government to control anyone’s behavior, and left wing liberals don’t view poverty as being primarily a problem of poor people’s behavior.

The disadvantage is that the poor make politically unpopular and often short-sighted decisions. The poor drink more, have more children out of wedlock, are more likely to be unemployed, drop out of high school, take payday loans, buy lotto tickets, and a host of other behaviors that are not prudent. Causality runs both ways: poverty causes bad decisions and bad decisions cause poverty.

What welfare program places no behavioral requirements whatsoever on its recipients? Social Security. It’s the exception that proves the rule. People don’t think of senior citizens as inherently immoral and they are high status. Furthermore, they aren’t expected to be productive, so their immoral behavior doesn’t affect society as much. Thus, Social Security recipients are not drug tested, they don’t have behavioral requirements (such as job searching), and they have no restrictions placed on them as to what they are allowed to spend the money on.

Cost
I investigated the cost of basic income and find that it would be affordable (but very expensive) at around $500 per person per month. That’s about half the poverty line, so it wouldn’t end poverty, but it would eliminate severe poverty and deprivation. Yes, it’s an expensive program. Yes, it would require the government to cut other spending, especially other welfare spending. It would not totally destroy the budget or have any other apocalyptic effects.

Health care is the wild card of American poverty. America has a uniquely bad health care system that is neither free market nor government. It’s got the worst traits of both systems, with uneven coverage, high prices, lack of information, lack of incentives, lack of competition, slowed innovation (relative to free market), and financial traps for the poor. Basic income would not address this problem. No plausible level of basic income would allow people to afford decent health care without major reforms or some other medical welfare program.

Behavioral Impact
Many articles argue that a basic income would dramatically reduce employment, but a basic income wouldn’t necessarily discourage working any more than our current system. There are two factors to consider: substitution and an income effects.

Income Effects
As people get richer, they usually chose to work less. For example, if someone won the lottery, it wouldn’t be unreasonable for them to quit their jobs. However, basic income would probably be at or below the poverty line, so such a life would be quite austere.

The people leaving the labor force for such a lifestyle would be those with very low earnings potential or a high disutility of work. For society, having a large number of people who don’t earn much quit the labor force does not reduce total production or tax revenue very much. At higher incomes, quitting to take a basic income would not be an attractive proposition.

Substitution Effects
A lump sum transfer does not affect marginal incentives, however the basic income needs to be paid for by taxation. There’s no way a society can give everyone a net amount of money, since that money has to come from somewhere. Therefore, on average, just like any other welfare system, the amount of money received will be slightly negative (because of costs of redistribution/administration). In practice, those who are poorer than average will get money, and those who are richer than average will pay money. It is likely that if a basic income were enacted, the government wouldn’t transfer income to everyone, but instead would transfer it only to people whose income fell below a certain point. Otherwise, you’d just wind up giving people money and taking it right back. As Social Security is a sort of “basic income for the old”, they would probably not get any additional money.

Screen-Shot-2016-06-09-at-10.54.24-AM

Under our current tax/welfare system, the poor often face higher marginal tax rates than the rich. Let’s say there’s a welfare program that gives you a benefit worth $2000, but you have to earn less than $10,000 per year to get it. If you make $9999, you have a huge incentive not to work a few extra hours and lose that benefit. If you add up all benefits like this across federal and local programs, there are some areas where the poor are marginally taxed at almost 100% of additional income.

CBO marginal_tax_1

Even if a basic income were taxed back at a high rate, as long as it replaced welfare programs with higher marginal tax rates, the net effect would be to lower marginal tax rates on the poor and get rid of poverty traps.

Assorted Links

June 28, 2016

1. Rome vs. Pirates

2. Can Social Science find the truth?

3. How OPEC lost

4. Varoufakis on the EU

5. Reflections on Brexit

Economist Morality

June 10, 2016

An action is moral if there are no better alternatives to it.

Economists espouse the idea of opportunity cost. Life consists of choices. Those choics are between various options, and picking one means not picking all the others. The best option not chosen is the opportunity cost. For moral decisions, there is also an opportunity cost.

Unfortunately, it is all too common to encounter a non-profit organization that does not use its donations wisely. Giving to them anyway is considered morally good by most systems of moral philosophy. However, economists might argue that you are failing to get the most charitable value for your money and thus it is actually wrong to give to those sorts of organizations.

Economists are often accused of playing devil’s advocate. That’s somewhat correct and somewhat incorrect. Economists have the ability to look at difficult situations critically and really ask what the best option is. Non-economists try to opt out of the situation entirely, but that’s not a real option. As the great philosopher Geddy Lee once said “If you chose not to decide, you still have made a choice.” Outlawing difficult choices simply means people in those situations have to pick one option instead of getting to chose themselves.

Examples of subjects where economist morality is better than common sense morality:
Sweat shops
Minimum wage
Price gouging
Safety laws
Child labor laws
Fair trade
Job creation on wasteful projects/broken windows – Ironically justified by economics