From a commenter on this post.
The main goal of the ascendant educated left-wing white people is to differentiate themselves socially from middle-class white people.
I thought that was too accurate and too succinct to leave buried in the comments.
Monthly Archives: July 2015
Cooling Culture Wars
To take one obvious example, do you treat conservative Christians who say terrible things about gay rights activists the same as gay rights activists who say terrible things about conservative Christians? Men’s rights activists the same as feminists?
We are all more attuned to the offenses against our own beliefs than we are to what may seem terribly offensive to others.
I would make the following observations:
1. Criticizing aggression from the opposite side tends to heat up the culture war.
2. Criticizing aggression from your own side tends to cool down the culture war.
3. Failing to criticize obvious aggression from your own side tends to heat up the culture war.
4. Failing to criticize obvious aggression from the opposite side tends to cool down the culture war.
These are difficult thoughts to keep in mind.
Pete Boettke on Economic Reasoning
Sound economic reasoning teaches many things, but perhaps the most important lesson is about the importance of the instituitonal framework for marshalling the self-interest of individuals into publicly desirable outcomes by enabling the judicous negotiation of trade-offs so that the gains from trade and the gains from innovation are realized. Some instituitonal environments promote productive specialization and peaceful social cooperation among individuals, others don’t. Economic reasoning is essentially discursive reasoning in comparative institutional analysis.
I recommend the entire post.
Hipster Politics
Today, on every recent major issue that divides the Democratic Party, the side favoring highly-skilled workers has won over labor union opposition
Pointer from Tyler Cowen. Ferenstein says that the Democrats’ Silicon Valley constituency favors public charter schools, high-skilled immigration, Korean Free Trade, and Uber, while opposing the Keystone Pipeline. Unions have taken the opposite side, but at least in Congress the Democrats are going against the unions.
The article is interesting throughout. My thoughts:
1. I don’t think that the tech crowd is enthusiastic about the oppressor-oppressed axis. And yet they still consider Barack Obama to be cool. I doubt that Elizabeth Warren or Bill de Blasio do much for them. Or Hillary Clinton, for that matter. As far as I can tell, Silicon Valley does not have a dog in the Democratic race for President.
2. From the tech crowd’s perspective, Republicans are better on education and on Uber. In both cases, Republicans are more supportive of entrepreneurialism.
3. Still, I do not expect the tech crowd to defect from to the Republican Party. There will emerge some issue that makes the tech crowd hard-core Democrats. In the past, abortion rights played that role among many of my friends. They are not techie types, and they hold conservative views on some economic and foreign-policy issues, but for them Republican opposition to abortion rights was always considered a show-stopper. So what issue will play that role today in among the tech crowd? Gay marriage? Immigration?
What the Fed Represents
The Fed should welcome limits on its responsibilities, and a clear and happy arrangement with Congress.
This might be true in a world where people were focused on implementation of Constitutional principles. But think about what the Fed represents. Do you remember when on health care people were saying that we need something like the Fed for health care?
The Fed represents the idea of experts with esoteric expertise who are independent from Congress. Their exercise of discretionary power is deemed vital for the health of society. The Fed thus represents the ultimate Progressive institution. Rational governance tames the free market. Non-partisan technocrats overcome the flaws in Constitutional democracy.
This mythical Fed is what is threatened by the sorts of laws that Cochrane was asked to testify about.
Don Kohn gives the mainstream response. Pointer from Mark Thoma.
Questions that came up at lunch yesterday
Organized by Tim Kane, with John Cochrane, several GMU stalwarts, Tevi Troy, Brink Lindsey, and others. These were some of the questions I asked.
1. Are colleges deteriorating in quality as fast as I think they are? This was a side conversation, and several participants expressed the viewpoint (wishful thinking?) that all but the most well-endowed colleges could find themselves suddenly overwhelmed by alternative modes of education and credentialing.
2. In the 1950s, many of the large successful businesses (McDonalds, Holiday Inn) were founded by men who never attended college. Why does that seem unlikely today? One answer given was that in the 1950s, you could have only a high school education and still be well above average in terms of cognitive skills, self-control, and other traits.
3. There was a lot of talk about how things are not really as bad for the middle class as the left makes them out to be. I asked, if things are not so bad, then imagine giving a talk to people in a small town in Ohio or in rural Oklahoma. What sorts of advice about future jobs would you give? Some of the answers were glib (“Move to the city.”) Others suggested that the jobs would be in fields like nursing. But not everyone is cut out to be a nurse.
4. Think of a world with momentum investors (“the trend is your friend”) and contrarian investors “If something cannot go on forever, it will stop.”) Can we get bubbles when for a period of time momentum investors overwhelm contrarian investors? The response (I’ll take a risk that I am violating some implicit rules and give away that it was John Cochrane who gave it) is that this sort of thing is more likely to happen in real estate markets than in financial markets, because in real estate markets transaction costs are high. You cannot go short. It is hard to take a large long position (you buy one house at a time, not many houses).
One question that came up concerned the effect of Chinese exports on American wages. With manufacturing a relatively small share of GDP, it was argued that the effect on overall wages cannot be large. Still, the effect on some niches of workers seems to be large.
Someone else asked about the narrative that American workers are worse off than they were 50 years ago or 100 years ago. To those of us at lunch (all on the right side of the political spectrum), that seems ridiculously inaccurate. Yet it holds sway on the left, and it seems to work with the general public.
One answer is that people who take a pessimistic view of recent decades may be thinking in terms of the second derivative. That is, the standard of living is still increasing, but it is increasing much more slowly than it did 40 years ago, and thus it has disappointed expectations.
Another possible answer is that “average is over.” If you are poor and not always employed, then between government benefits and low-cost goods, you can get by. But if you work full time and aspire to be middle class, your consumption basket is more expensive and government is not helping you.
Later, it occurred to me that the left’s story has the advantage that there is a villain. The evil CEOs and capitalists have taken away something from ordinary workers. No matter how many facts you throw back at them, any story with a villain is more compelling than one without one.
Incidentally, that makes it pretty futile for conservatives to try to play the compassion card (sorry, Arthur Brooks). People respond to villains. To compassion, not so much.
Timothy Taylor on Nudging and Public Choice
think about elected officials and regulators in the spirit of behavioral economics: they often lack self-control; have a difficult time evaluating complex situations; tend to stick with rules-of-thumb and default options rather than accept the cognitive and organizational costs of re-evaluating their positions; do not evaluate costs and benefits in a consistent way across different contexts; are not good at evaluating risks accurately, instead often respond to limited information and hype; and are overly averse to the risk of taking responsibility for decisions that might turn out poorly. This perspective must have widespread implications for decisions involving the complexities of the tax code or government budgets, policies affecting the workforce and the environment, openness to new sources of domestic and foreign competition, and foreign policy as well.
He is riffing off a paper by W. Kip Viscusi and Ted Gayer.
Defining Money Like a State
single currencies are never the product of debates about optimal economic solutions. Instead, currencies like the U.S. dollar itself are the result of political battles, where motivated actors try to centralize power. This has most often occurred “through iron and blood,” as Otto van Bismarck, the unifier of Germany put it, as a result of catastrophic wars. Smaller geographic units were brought together to build the modern nation state, with a unified fiscal system, a common national language that was often imposed by force, a unified legal system, and, a single currency. Put differently (with apologies to sociologist Charles Tilly), war makes the state, and the state makes the currency.
The U.S. case is instructive. America used to have a chaotic multitude of state currencies and privately issued bank notes, with complex exchange rates between them. This only changed thanks to the Civil War. The American greenback was created in 1863 when Abraham Lincoln’s Republican Party muscled through legislation giving the federal government exclusive currency rights. It was only able to do this because Southern legislators, who opposed more centralization of power, had seceded from the American union.
Pointer from Mark Thoma, who comments, “whether the euro was politically motivated for the most part, or not, economics matters for the sustainability of a political union.”
Price Stickiness is Only One Coordination Failure
For both firms and individuals, resistance to downward price adjustment is often rational, even when at a macroeconomic level universal downward adjustment would be desirable (perhaps because the central bank and/or state have failed to accommodate the expected path of nominal incomes, perhaps because nominal exchange rates are rigidly misaligned). If we could wave a magic wand and have wages, prices, and especially debts all simultaneously scale downward, that might be awesome. But, unfortunately, we can’t.
I think both Tyler Cowen and Mark Thoma pointed to this post. Read the whole thing.
The problem with the macroeconomic perspective is that when you think of the economy as a GDP factory, then the only reason you can think of for it not to operate at capacity is that the ratio of M to P is too low. Instead, if you think in terms of PSST, you can think of all sorts of reasons for coordination failure.
The chains of production are really long and complex. Somebody has a job doing “business development” for a company trying to make money out of an app. That job is so far from producing widgets that it is ridiculous.
In addition, pretty much everything we buy is discretionary. The seller of almost any product or service could wake up tomorrow and find the demand for that product or service poised to fall off. Need I cite landline telephones, retail music stores, or taxi drivers?
In the PSST story, the rigidities that matter are the burdens of trying to start a new business and the reluctance of people to relocate and to change occupations. The ratio of M to P just doesn’t amount to a hill of beans in an economy that depends on deep, complex coordination in the market process.
Fashions Change on Campus
From an article in the Washington Post.
As colleges grapple with the widespread problem of sexual assault, there is a growing consensus that the nation’s schools need to do more to educate young people about sex and relationships before they ever set foot on campus.
The focus of the article is on attempts to use sex education in grades K-12 to explain the concept of consent to young people.
My point is not to say whether this is good or bad. What strikes me is how swiftly the fashions have changed on elite college campuses. As recently as five or six years ago, if you had asked me, I would have have said the colleges do too much to encourage casual sex–telling the resident assistant to keep a set of condoms in a candy dish so that anyone could come by and grab one as needed. Now, the colleges seem to be headed in the complete opposite direction. Not that they want to get rid of the condoms, but they seem to be trying to make sure that no one can have fun using them.
On a rather different note, Bart Hinkle gives an example of the campus fashion for “inclusion.”
Among other things, candidates should “include a list of activities that promote or contribute to inclusive teaching, research, outreach, and service”; they should report information about their “contributions to an inclusive campus”; they should write about their “active involvement in diversity and inclusion”; demonstrate that they have pursued “training in inclusive pedagogy”; incorporate “the Principles of Community into course development”; and so on. A spokesman for the university says providing such information is purely voluntary — but who applying for promotion or tenure is likely to see it that way?
He points out that if someone were to impose a similar requirement on professors to demonstrate their patriotism, people would be properly outraged.
I am becoming increasingly concerned that sending children to college is dangerous for their intellectual health. I am afraid that instead of being told how to think, students are being told not to think. They are being ideological role models, not intellectual role models.
Had someone expressed such sentiments to me fifteen years ago, I would have dismissed that person as a paranoid right-wing nutjob. I infer that in the meantime either I have turned into a paranoid right-wing nut job or there has been a significant erosion of intellectual integrity at American colleges, or both.
I am inclined to believe that it was rapid erosion of intellectual integrity. I think that the last 15 years have witnessed a change in the demographics of the professoriate. Professors with intellectual integrity have aged out or otherwise departed. An anti-intellectual conformity has appeared in their place. When you have intellectual integrity, you don’t see these sorts of abrupt fashion changes. I think of intellectual integrity as getting your beliefs from careful reflection. That means that you did not rely on fashions in the first place, and you do not change your beliefs to fit the latest fashion.