Quotulatiousness

August 4, 2013

Who speaks for those neither rich nor poor?

Filed under: Economics, Government, USA — Tags: , , , — Nicholas @ 09:37

Victor Davis Hanson on the forgotten people in the middle:

There are more than 48 million Americans on food stamps, an increase of about 12 million since the beginning of the Obama presidency.

At a time of record-high crop prices, the U.S. government still helps well-off farmers with some $20 billion in annual crop payouts and indirect subsidies.

The Left mythicizes food-stamp recipients almost as if they all must be the Cratchits of Dickensian England.

The Right romanticizes corporate agriculture as if the growers all were hardscrabble family farmers in need of a little boost to get through another tough harvest.

Those in between, who pay federal income taxes and are not on food stamps, lack the empathy of the poor and the clout of the rich. Can’t a politician say that?

Illegal immigration is likewise not a Left vs. Right or Republican vs. Democrat issue, but instead mostly one of class.

The influx of millions of illegal immigrants has ensured corporate America access to cheap labor while offering a growing constituency for political and academic elites.

Yet the earning power of poorer American workers — especially African Americans and Hispanic Americans — has stagnated.

The common bond between the agendas of La Raza activists and the corporate world is apparently a relative lack of concern for the welfare of entry-level laborers, many of them in American inner cities, who are competing against millions of illegal workers.

Given the slow-growth, high-unemployment economy, and the policies of the Federal Reserve, interest on simple passbook accounts has all but vanished.

The poor are not so affected. They are more often borrowers than lenders, and they are sometime beneficiaries of federally subsidized debt relief.

The rich have the capital and connections to find more profitable investments in real estate or the stock market that make them immune from pedestrian, underperforming savings accounts.

In other words, this administration’s loose money policy has been good for the indebted and even better for the stock-invested rich. But it is absolutely lousy for the middle class and for strapped retirees with a few dollars in conservative passbook accounts.

July 3, 2013

Kathy Shaidle’s “Dispatch from Canada”

Filed under: Cancon, Economics, USA — Tags: , , , , , — Nicholas @ 09:21

Kathy will be writing a weekly column for our American friends, updating them with whatever’s up here in the Great White North. Given how little actually ever happens in Canada, it might be just a weather report or the latest style change for Justin Trudeau’s hair. However, to start it off, yesterday’s column attempted to correct a few common notions about Canada:

Because a lot of what you think you know about Canada is probably decades out of date.

As investment bigwig and journalist Theo Caldwell recently noted:

    But Canada is far from American stereotypes of socialism, centralization and obeisance, at least in relative terms. By almost any measure, Canada is a freer country than the U.S.A.

    Economically, the contrast is stark, for those who care to see. While folks reflexively state that Canadian taxes are higher than those of the United States, corporate and personal rates are lower up north.

How much lower are those corporate taxes? Canada ranks 6th lowest out of 185 nations. America came in at a shocking 69th place.

Believe it or not, Canada’s average household net worth is higher than America’s.

We also have lower unemployment, and our economy is holding steady, thanks in part to our ingenious refusal to give mortgages to welfare bums.

We have fewer divorces, fewer traffic fatalities, and way fewer tornadoes.

We’re skinnier, too. (Seriously: your restaurant portions are freakishly huge.)

But what about “the American Dream”?

According to one (Canadian) economist, “a son born to a poor father in the U.S. is twice as likely to remain poor throughout his life than if he had been born in Canada.”

[. . .]

We’ve got our flaws too, of course.

We literally have no abortion law, which means it’s easier to get one than a gun, even at the nine-month mark.

There’s no death penalty. And try getting an MRI, unless you’re a cat.

Our cops are increasingly corrupt, if not downright fascist. (Don’t be fooled by the propaganda about the noble, virtuous Mountie…)

We have this unelected Senate thing (long story) and a dorky constitution, especially compared to yours.

And don’t get me started on Quebec.

The most blatant display of “one law for the rich, one law for the poor”

Filed under: Law, Liberty, USA — Tags: , , , , — Nicholas @ 07:54

Reason‘s Mike Riggs points out the most amazing part of the Aaron Hernandez case:

Let me paint the scene for you: It’s broad daylight out. A group of six Massachusetts State Police officers in suits and ties approach Hernandez’s North Attleborough mansion from the front. Three of them walk up the steps of his porch, and — with their guns holstered — knock on the door. After roughly 50 seconds of knocking and doorbell-ringing, a shirtless Hernandez opens the door and lets six suited staties, plus a cop in uniform, come inside. As one officer starts to cuff Hernandez right there in the foyer, another officer closes the door, presumably to provide Hernandez with some privacy. A few seconds later, Hernandez — now with a tee-shirt pulled over his handcuffed arms and torso — is led outside to a cop car, where officers gently lower him into the back seat and put on his seatbelt.

No battering ram. No flashbangs. No paramilitary gear. I was shocked.

Compare and contrast this arrest — for homicide — with this arrest first reported by Radley Balko:

In 2011, a SWAT team conducted a midnight raid on Stamps’ home in Framingham looking for a couple of small-time crack dealers. In the chaos and cloud of adrenaline that results from knocking down someone’s door and flooding his home with men dressed like soldiers, an officer shot Stamps in the neck, killing him. The city’s chief of police would later say that Stamps was “tragically and fatally struck by a bullet which was discharged from a SWAT officer’s rifle”; as if guns fire themselves.

When police eventually found who they were looking for — not Stamps, but his stepson and the stepson’s cousin — neither of them was armed. Nor did police find any firearms in the house.

It almost sounds backwards, doesn’t it? Killing an unarmed senior citizen in the process of arresting two unarmed kids holding a couple hundred bucks and some crack, while sending guys in their Sunday best to bring in a man allegedly involved in not just one violent, gang-related murder, but three?

[. . .]

This trend isn’t limited to Massachusetts. Across the country, poor people experience an entirely different criminal justice system — from arrest to prosecution — than the wealthy. Oftentimes, this means blacks are treated more harshly than whites and that the people who sell illegal drugs for money are treated differently than bankers who launder that money.

While football fans are free to care about whatever they want, the most shocking aspect of the Hernandez case isn’t that an incredible athlete killed anywhere from one to three people, it’s that the location of his home and the name of his employer bought him courtesies that poor, nonviolent offenders committing consensual crimes seldom experience.

Update: The Hernandez case gets even more weird:

Investigators in the Aaron Hernandez murder case were prepared to interview a Bristol man who was killed early Sunday when he crashed a car registered to his father-in-law, the former New England Patriot tight end’s uncle.

Multiple law enforcement sources said Massachusetts investigators were interested in speaking with Thaddeus Singleton III, 33, because he was associated with Hernandez. Singleton, who records show has served time in state prisons on various drug-related convictions dating to the mid-1990s, was killed when the car he was driving shot 100 feet through the air and hit the Farmington Country Club 6 feet off the ground.

Maybe this is something new in Nissan automotive technology, but it’s a rare vehicle that can shoot 100 feet through the air and impact a building six feet up? Impressive.

July 1, 2013

The rise and fall of economic powers

Filed under: China, Economics, History, Japan — Tags: , , , , , — Nicholas @ 10:30

Charles Hugh Smith has a guest post at Zero Hedge, talking about the theme of economic decline of great powers:

Our collective interest in the rise and fall of empires is not academic. The meteoric rise of China and the financialization rotting out global capitalism are just two developments that suggest we are entering an era where some great powers will collapse, others will remake themselves and others will gain ascendancy.

[. . .]

In 1987, pundits were predicting that Japan’s “5th generation” computing would soon dominate what was left of America’s technological edge. They were spectacularly wrong, as the 5th generation fizzled and Japan became an also-ran in web technology, a position it still holds despite its many global electronic corporations and vast university research system.

Japan’s modern economy was set up in the late 1940s and early 1950s to exploit the world of that time. Sixty years later, Japan is still a wealthy nation, but its relative wealth and power have declined for 20 years, as its political-financial power structure clings to a model that worked splendidly for 40 years but has not worked effectively for 20 years.

The decline is not just the result of debt and political sclerosis; Japan’s vaunted electronics industry has been superseded by rivals in the U.S. and Korea. It is astonishing that there are virtually no Japanese brand smart phones with global sales, and only marginal Japanese-brand sales in the PC/notebook/tablet markets.

The key dynamic here is once the low-hanging fruit have all been plucked, it becomes much more difficult to achieve high growth rates. That cycle is speeding up, it seems; western nations took 100 years to rapidly industrialize and then slip into failed models of stagnation; Japan took only 40 years to cycle through to stagnation, and now China has picked the low-hanging fruit and reverted to financialization, diminishing returns and rapidly rising debt after a mere 30 years of rapid growth.

There is certainly evidence that China’s leadership knows deep reform is necessary but the incentives to take that risk are low. Perhaps that is a key dynamic in this cycle of rapid growth leading to stagnation: the leadership, like everyone else, cannot quite believe the model no longer works. There are huge risks to reform, while staying the course seems to offer the hope of a renewal of past growth rates. But alas, the low hanging fruit have all been picked long ago, and as a result the leadership pursues the apparently lower-risk strategy that I call “doing more of what has failed spectacularly.”

Though none of the historians listed above mention it, there is another dangerous dynamic in any systemic reform: the very attempt to reform an unstable, diminishing-return system often precipitates its collapse. The leadership recognizes the need for systemic reform, but changing anything causes the house of cards to collapse in a heap. This seems to describe the endgame in the USSR, where Gorbachev’s relatively modest reforms unraveled the entire empire.

June 3, 2013

“Checking your privilege”

Filed under: Britain, Humour, Media, Politics — Tags: , , , — Nicholas @ 09:14

Sean Thomas outlines the notion of “checking your privilege” before discovering that he is the most underprivileged person in Britain:

The idea of Checking Your Privilege is that the opinions of “underprivileged” people, in any political debate, are deemed to be intrinsically more important and valuable than the beliefs of those who are luckier in life.

This is especially true if the debate relates to an area in which The Underprivileged Person is adjudged to be deprived. Extreme versions of Privilege Theory assert that, in especially sensitive arguments, the more privileged person should say nothing at all. e.g. white people are not allowed to express an opinion on racism.

[. . .]

It’s an impressive list of deprivations. Sometimes, when I look at my life, I wonder if I am [a] talented black saxophone player in the 1950s, or at least a meth dealer in central Baltimore – rather than a writer in north London. Certainly, I am THE most underprivileged person in the UK. And this means that my opinion is the most worthy and important of all, and everyone else must shut up, while I opine.

And my opinion is this: Privilege Checking is stupid. It is vacuous and diseased. It is a duet of moral vanity and bourgeois guilt which symptomizes the decadence and redundancy of what passes, today, for lefty “thinking”. Karl Marx (middle-class, well-travelled, disapproved of Engels’s plebby girlfriend) must be spinning on his Highgate pedestal when he sees what his great discourse has turned into.

I hope that clears things up. Now we can move on; IMHO, of course.

April 25, 2013

Populist talk on taxes may please the voters (sometimes), but it won’t help the economy

Filed under: Cancon, Economics, Government, Politics — Tags: , , — Nicholas @ 00:01

In Maclean’s, Stephen Gordon explains why the only kind of tax hikes that seem in any way “popular” are particularly bad if implemented:

Magical thinking might be smart politics, but it’s not very good economics. Here are the two most popular themes:

  1. Higher corporate income taxes. From a political marketing point of view, the appeal of increasing corporate income tax (CIT) rates is obvious: “Hey, I’m not a corporation, so it’s no skin off my nose.” But the economics of CIT rates are very dodgy indeed: higher CIT rates are the most costly way of generating revenue and are most harmful to economic growth. It also turns out that workers and consumers are the ones who ultimately bear the burden of higher CIT rates. (If you start taxing corporate profits, shareholders will eventually move their money to jurisdictions with more competitive rates, reducing the availability of investment capital. In the long-run, that results in lower output and weaker labour demand. More on that here.) But even if you were willing to pay these costs, higher CIT rates don’t generate much in the way of new revenues.
  2. Increased taxes on high earners. While there may be good reasons for wanting to use the personal income tax system to counter recent trends in the concentration of income, policymakers should be under no illusions about how much new revenue taxing the rich will bring in. There simply aren’t that many high earners to tax, and they have access to expert tax planning advice: there is overwhelming evidence showing that those with high incomes can and will respond to higher tax rates by reporting lower taxable income.

April 2, 2013

Revisiting the revisionist view of the “Satanic mills” of the British industrial revolution

Filed under: Britain, Economics, History — Tags: , , , , — Nicholas @ 08:55

Rather in keeping with the sentiments expressed in today’s Quote of the Day post, Emma Griffin explains why the workers generally thought of the industrial revolution as a very good thing indeed:

Writers and academics often show an interesting ambivalence about industrialization. Today, they regard it as a blessing, the single-most-effective way to lift people out of poverty. But in thinking about Britain’s Industrial Revolution, they have tended to reach the opposite conclusion: The rise of the factory, they argue, caused the end of more “natural” working hours, introduced more exploitative employment patterns and dehumanized the experience of labor. It robbed workers of their autonomy and dignity.

Yet if we turn to the writing of laborers themselves, we find that they didn’t share the historians’ gloomy assessment. Starting in the early 19th century, working people in Britain began to write autobiographies and memoirs in ever greater numbers. Men (and occasionally women) who worked in factories and mines, as shoemakers and carpenters, and on the land, penned their stories, and inevitably touched on the large part of their life devoted to labor. In the process, they produced a remarkable account of the Industrial Revolution from the perspective of those who felt its effects firsthand — one that looks very different from the standard historical narrative.

[. . .]

Higher levels of employment also helped change the balance of power between master and laborer. So long as jobs remained scarce, workers, by necessity, obeyed their employers. The price of dissent or disobedience was unemployment. With more jobs, such subservience became less and less necessary. In the booming new industrial towns, workers could, and did, walk out on employers over relatively minor matters, confident that finding more work wouldn’t be difficult. One autobiographer left his position simply because he “grew sick” of the work; another because he didn’t want to “beg pardon” after a falling out with his master; another objected to wasting his precious Sunday mornings at his master’s religious services; and another quit when his master refused to let him take his tea breaks off the premises. All working relationships are defined by a disparity in power between master and servant. But that inequality is rendered more palatable if we’re well remunerated for our services and can leave at will.

The way in which working people described the upheavals of this period provides us with a powerful reminder of the transformative effect of industrialization and of its capacity to improve living standards, even for the poor. Generations of historians have dwelled on the loss of old working patterns and presumed that the introduction of more intensive ones was detrimental to workers’ welfare. But these developments weren’t viewed in such a sinister light at the time. Industrialization promised full employment, and for those used to scraping together a living from the land, this was very good news indeed.

QotD: In praise of cheap, gimcrack, run-of-the-mill manufacturing

Filed under: Britain, France, History, Liberty, Quotations — Tags: , , , , — Nicholas @ 00:01

For the first time ever, labourers were able to purchase cheap goods for themselves. The first factories focused on mass production of cheap goods for the poor. Shoes, for example, were produced for the proletariat — the rich bought made-to-measure shoes. This was different from France, where the government’s mercantilist product standards, designed to uphold quality, ensured that nothing was produced for the poor at all. In France, mercantilism continued to be state policy for much longer than in England. This is the reason why industrialisation took fifty more years to arrive on France’s shores.

J.P. Floru, Heavens on Earth: How To Create Mass Prosperity, quoted by Brian Micklethwait at Samizdata, 2013-03-29.

January 20, 2013

Oxfam and the top 1%

Filed under: Economics, Media — Tags: , , , , — Nicholas @ 10:43

Oxfam is publicly blaming and shaming the top 1% of income-earners for their evil money-grubbing ways that deprive the worst-off and make poverty worse in developing countries. Simon Cooke explains why they’re wonderfully, gloriously wrong:

    “Concentration of resources in the hands of the top 1% depresses economic activity and makes life harder for everyone else — particularly those at the bottom of the economic ladder.”

And that top 1% isn’t you and me we’re led to believe — it’s those evil billionaire capitalists who are stealing the very bread from the mouths of the starving children. Let’s leave aside the fact that poverty is largely unrelated to inequality — people do not become rich by making others poor, however often Oxfam want to pretend that this is so. Instead let’s remind ourselves who the 1% are in terms of world development and poverty:

    The truth is that the entry level income for the world’s top 1% of earners is:

    $34,000

    That’s it, in real money not a great deal more than £20,000 a year gets you into the 1% club — sits you among the world’s filthy rich, among those to blame for all the sins and evil of the world. Capitalist scum.

Most of you reading this blog are in the top 1% sucking up all those resources — depriving the poor in Africa and elsewhere of the chance to grow, to get out of poverty.

Except you’re not. Sit back, put a smile on you face — punch the air with joy. You and me — capitalists both — have sat getting a little richer for thirteen years while a billion folk have escaped absolute poverty. All the international trade, all those businesses and those business folk filling the posh seats in aeroplanes flitting across the world — they’ve done that, they’ve lifted those people out of poverty.

Oxfam are wrong. Neoliberalism is making all the world richer. Even the UN celebrates that neoliberal success:

    “For the first time since records on poverty began, the number of people living in extreme poverty has fallen in every developing region, including sub-Saharan Africa. Preliminary estimates indicate that the proportion of people living on less than $1.25 per day fell in 2010 to less than half the 1990 rate…”

This is what capitalism does. Isn’t it wonderful.

December 28, 2012

The new Zero-Sum era of American politics

Filed under: Economics, Government, USA — Tags: , , , — Nicholas @ 10:18

P.J. O’Rourke offers some mild congratulations to President Obama for a few accomplishments during his first term, then explains why the way he won his second term is a bad thing both for the United States and for the rest of the world:

You sent a message to America in your re-election campaign. Therefore you sent a message to the world. The message is that we live in a zero-sum universe.

There is a fixed amount of good things. Life is a pizza. If some people have too many slices, other people have to eat the pizza box. You had no answer to Mitt Romney’s argument for more pizza parlors baking more pizzas. The solution to our problems, you said, is redistribution of the pizzas we’ve got — with low-cost, government-subsidized pepperoni somehow materializing as the result of higher taxes on pizza-parlor owners.

In this zero-sum universe there is only so much happiness. The idea is that if we wipe the smile off the faces of people with prosperous businesses and successful careers, that will make the rest of us grin.

There is only so much money. The people who have money are hogging it. The way for the rest of us to get money is to turn the hogs into bacon.

Mr. President, your entire campaign platform was redistribution. Take from the rich and give to the . . . Well, actually, you didn’t mention the poor. What you talked and talked about was the middle class, something most well-off Americans consider themselves to be members of. So your plan is to take from the more rich and the more or less rich and give to the less rich, more or less. It is as if Robin Hood stole treasure from the Sheriff of Nottingham and bestowed it on the Deputy Sheriff.

But never mind. The evil of zero-sum thinking and redistributive politics has nothing to do with which things are taken or to whom those things are given or what the sum of zero things is supposed to be. The evil lies in denying people the right, the means, and, indeed, the duty to make more things.

December 23, 2012

We’re at “peak farmland”

Filed under: Economics, Environment, Food, Health, Technology — Tags: , — Nicholas @ 10:17

Matt Ridley on an interesting paper from Jesse Ausubel and Iddo Wernick of Rockefeller University, and Paul Waggoner of the Connecticut Agricultural Experiment Station:

Globally, the production of a given quantity of crop requires 65% less land than it did in 1961, thanks to fertilizers, tractors, pesticides, better varieties and other factors. Even corrected for different kinds of crops, the acreage required is falling at 2% a year.

In the U.S., the total corn yield and the total corn acreage tracked each other in lock step between 1870 and 1940-there was no change in average yield per acre. But between 1940 and 2010, corn production almost quintupled, while the acreage devoted to growing corn fell slightly. Similar divergences appeared later in other countries. Indian wheat production increased fivefold after 1970, while wheat acreage crept up by less than 1.5 times. Chinese corn production rose sevenfold over the same period while corn acreage merely doubled.

Yet the amount of farmland in the world was still rising until recently. The reason is that increased farm productivity has been matched by rising demand for food, driven by population growth and swelling affluence. But the effects of these trends are waning.

[. . .]

Even with these cautious assumptions, the researchers find that over the next 50 years people are likely to release from farming a land area “1½ times the size of Egypt, 2½ times the size of France, or 10 Iowas, and possibly multiples of this amount.”

Indeed, the authors find that this retreat from the land would have already begun but for one factor so lunatic that they cannot imagine it will not be reversed soon: biofuels. If the world had not decided to subsidize the growing of energy crops on 3.4% of arable land, then absolute declines in the acreage of arable land “would have begun during the last decade.” The prospect of “the restoration of vast acreages of Nature” is enticing for nature lovers.

December 19, 2012

The “digital divide” didn’t play out quite the way they thought

Filed under: Economics, Education, Media, Technology, USA — Tags: , , , , — Nicholas @ 00:01

In Gregg Easterbrook‘s weekly NFL column, he often discusses non-football topics like this one:

A decade ago — perhaps as recently as five years ago — analysts and educators feared a “digital divide” in which the affluent have access to advancing electronics and the disadvantaged do not, granting the affluent yet another edge in life’s contest. But what if the reverse has happened?

[. . .]

That made this article striking, with research showing children from disadvantaged families now waste more time with video games and on the Internet than do children from affluent homes. Publicly subsidized programs to provide computers and Internet to the disadvantaged were rationalized as tools for education. How are they actually used? The article quotes Vicky Rideout, author of a study on the subject, saying, “Despite the educational potential of computers, the reality is that their use for education or meaningful content creation is minuscule compared to their use for pure entertainment.”

Video games are a really tempting way to avoid studying. If they had been around when I was a teen, there’s no way I would have read so many books or spent three or four hours after school each day at the high school, doing extracurriculars and sports. I might instead have wasted my time with electronics.

Girls and women are taking over college admissions; 57 percent of undergraduate students at four-year colleges are female. There are many reasons, and surely one is that teen girls waste less time on video games than teen boys do. If disadvantaged teen boys are wasting more time than affluent teen boys, that makes the picture worse.

Conservative commentators often “harrumph” about rising living standards for the disadvantaged, many of whom now have air conditioning, laptops and other items once associated with affluence. It’s good that living standards are rising, and it’s good that the digital divide is disappearing. The spread of computers and Internet service into disadvantaged homes creates equity in access to the information and services available on the Web. But society needs to be aware of the downsides of electronics. Those computer and software gifts being opened this holiday season might, especially for teen boys, backfire.

December 15, 2012

We solve a worldwide problem … and replace it with a new worldwide problem

Filed under: Africa, Economics, Food, Health — Tags: , , — Nicholas @ 00:02

Malnutrition used to be one of the biggest problems facing the planet: except in the west, starvation was rarely more than a bad harvest away. Today, except in sub-Saharan Africa, that’s been replaced by obesity as a worldwide problem:

Here’s a good news story that warmed the cockles of my heart as I wolfed down my breakfast of chocolate croissant with extra-large latte — obesity is now more of a problem than starvation. As we report:

    With the exception of sub-Saharan Africa, eating too much is now a more serious risk to the health of populations than eating poorly, found the Global Burden of Disease study, published in a special edition of The Lancet.

    Across the world, there has been significant success in tackling malnutrition, with deaths down two-thirds since 1990 to less than a million by 2010.

    But increasing prosperity has led to expanding waistlines in countries from Colombia to Kazakhstan, as people eat more and get less everyday exercise.

[. . .]

Likewise the fact that humanity can not only feed billions of people, but feed them well enough to give many of them Type-2 diabetes, shouldn’t be considered a worry but, after the Moon landings, perhaps humanity’s greatest achievement yet. Yes, we’re all stuffing ourselves silly, but we evolved in an environment where food was scarce and fats were vital to our survival. The very fact that, despite numerous doomsayers, we continue to overcome our problems, is something we should be celebrating.

December 1, 2012

Tyler Cowen and Andrew Coyne on The Great Stagnation

Filed under: Books, Economics, Media, Technology, USA — Tags: , , , — Nicholas @ 09:35

Tyler Cowen discusses his book The Great Stagnation: How America Ate All the Low-Hanging Fruit of Modern History, Got Sick and Will (Eventually) Feel Better. Andrew Coyne (National Post) presents a rebuttal and the pair discuss Cowen’s thesis focusing on issues of productivity, innovation and government policy (moderated by Wendy Dobson).

November 6, 2012

Adam Smith’s “invisible hand”

Filed under: Books, Economics, History, Liberty — Tags: , , , — Nicholas @ 00:01

From LearnLiberty.org

Why are some countries wealthy while other nations are poor? Prof. James Otteson, using the ideas of Adam Smith, explains how the division of labor is a necessary and crucial element of wealthy nations. Additionally, Otteson explains Smith’s idea of the invisible hand, which explains how human beings acting to satisfy their own self interest often unintentionally benefit others.

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