Monthly Archives: January 2017

Defending those with whom you disagree

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Tyler Cowen writes,

write occasional material in support of views you don’t agree with. Try to make them sound as persuasive as possible. If need be, to keep your own sense of internal balance, write a dialogue between opposing views, just as Plato and David Hume did in some of their very best philosophical works.

I can do that with macroeconomics. I used the dialogue method in my Memoirs of a would-be macroeconomist.

I find it more difficult to do with politics. The Three Languages of Politics sort of does it, although it looks more at the more simplistic and dogmatic arguments of progressives, conservatives, and libertarians.

In fact, what bothers me the most in political discussions is simple-minded dogmatism. As I watched people in my neighborhood head to the subway to the march against Trump, my head was filled with the Stephen Stills lyric, “Singin’ songs, and they’re carryin’ signs. Mostly say ‘Hooray for our side.'”

So, relative to my views, the most contrarian position I could take would be a really dogmatic view, whether it is libertarian, conservative, or progressive. But I cannot make dogmatism sound persuasive.

A better approximation of Tyler’s idea for me would be to champion central planning. To do that, I would argue primarily on grounds of risk aversion. That is not the usual progressive case, which is more utopian. I might suggest that having elites in control may limit the magnitude of mistakes. Even that is difficult for me to argue–probably the most formative experience on my political beliefs was the Vietnam War.

WaPo Watch

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Fred Hiatt writes,

The answer to dishonest or partisan journalism cannot be more partisan journalism, which would only harm our credibility and make civil discourse even less possible. The response to administration insults cannot be to remake ourselves in the mold of their accusations.

…So far, I believe The Post has been setting the standard in this difficult job. It is not boasting for me to say so, because as editorial page editor I have no input in The Post’s news coverage. I am only a reader, like all of you.

Of course, I disagree the the Post has been setting a standard. And in fact, as of now, the Post’s web site is telling readers that the shooting at a Mosque in Quebec is a Trump-inspired hate crime.

the context of the attack was inescapable, coming after a rise in anti-Muslim rhetoric, behavior and vandalism in the United States and Canada, amid a heated debate about President Trump’s executive order temporarily shutting U.S. borders to refugees and migrants from seven mostly Muslim countries.

It could turn out that the shooters were inspired by Trump. I have no idea. But I think that this way of framing the story is at best premature. And if it turns out to be wrong, it is irresponsible. Just stick to the facts, and spare us the “context.”

UPDATE: Unlike the Post story, which mentions Trump several times, the Globe and Mail account, which includes more facts and only facts, does not mention his name once.

UPDATE 2: Currently, the suspect is described in other media as anti-immigrant. If it holds up, it goes a long way toward exonerating the Post.

Jeff Sachs on Health Care Policy

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He writes,

That report found that the higher health care outlays in the United States–compared with Europe, Canada, Japan, and Australia–are due to the higher prices of health services. . .rather than to a greater use or higher quality of those services.

That is on p. 64 of his new book, Building the New American Economy. The report that he footnotes is this one from the Institute of Medicine.

I looked through the report, and I did not see the comparison to other countries to which Sachs refers. The report does have a table that allocates what it calls excess spending in the United States, which briefly looks like this:

Category Excess Cost
Unnecessary services $210 billion
Inefficiently delivered services $130 billion
Excess administrative costs $190 billion
Prices that are too high $105 billion
Missed prevention opportunities $55 billion
Fraud $75 billion

I am not endorsing these numbers. My point is that the report’s analysis and recommendations differ considerably from the way that Sachs construed them.

I do not ordinarily write about books that I do not like. I was sent a review copy, and I would like to be charitable about it.

Sachs is not always wrong. He is willing to dispute mainstream economists, and I certainly do not hold that against him. But wading through this careless and dishonest book left me hoping that the Democrats stick with their mainstream economists.

The Irrational Voter Decides

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Jacob T. Levy writes,

The 2016 election exposed grave vulnerability and fragility in the American party system. One major party was successfully hijacked by an extremist outsider in the face of initial opposition from a huge portion of the party’s elites and elected leaders. The other party came surprisingly close (if still not objectively very close) to meeting the same fate

Pointer from Tyler Cowen.

My thoughts:

1. I would suggest that the Democratic Party was hijacked by an outsider in 2008.

2. It appears that being hijacked by an outsider works to a party’s advantage, at least in the short run. If the Republican elite had succeeded in putting in their candidate (Rubio?), the Republicans probably would not have picked up the Rust Belt states that went for Mr. Trump. In this alternate history, Mrs. Clinton becomes President. Given that Levy laments the weakening of the Republican Party elite, he implicitly prefers this alternate history. I do not. Yet.

3. As Levy points out, partisanship is high.

89% of Democrats voted for Clinton, 90% of Republicans for Trump. Those figures are down a touch from 2012—both major parties lost more voters to third parties than in 2012—but considering the year of headlines about how unpopular both candidates were, the result is stark.

Also, partisanship is correlated with knowledge.

4. What this means is that a Presidential election is “swung” by a tiny number of voters who are only weakly partisan. My guess is that swing voters probably have the least ability to articulate a connection between the policies of their candidate and the outcomes that they desire. I would guess that if you interviewed voters in the counties that “flipped” from Obama to Trump, you would not be very impressed with their rationales behind either choice.

5. Pause and consider just how random this is. A few yahoos switch their votes, and this causes about half the country to be somewhat pleased and the other half to be bummed out of their minds.

6. What Levy seems to want to do is strengthen the parties, so that the elites can choose the candidates. He is nostalgic for the era of “the party decides.” Going back to that era would presumably produce candidates who rely less on personal charisma and more on the ability to get along well with party leaders.

7. If we go back to “the party decides,” one result would be to limit the potential impact of “swing” voters. The worst that they could do is pick the “wrong” establishment candidate, as opposed to going for an unreliable novice.

8. The outsider Obama leaves behind an unusually weak Democratic Party. It is not hard to imagine something similar happening to the Republicans under President Trump.

9. If you believe Martin Gurri, then the currents at work weakening the insiders are much deeper than nomination rules or other party mechanics.

Means Testing and Behavior Testing

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When it comes to giving taxpayer aid to poor households, I think that people favor a combination of means testing and behavior testing. [UPDATE: between the time I wrote this and the time I posted it, Bryan Caplan expressed similar ideas.]

Means testing follows the principle that the more you can earn on your own, the less aid you get. Contrary to appearances, a basic income grant works that way, assuming that there is an income tax operating in parallel. See my explanation of the equivalence of a basic income grant with a negative income tax.

Behavior testing follows the principle that the more that your poverty is your fault, the less aid you get. Somebody who is mentally and/or physically handicapped deserves more aid than someone who is able-bodied and able-minded.

My view is that the Federal government has a comparative advantage at handing out means-tested aid, while local governments and charities have a comparative advantage at handing out behavior-tested aid. So I would like to see the Federal government provide a small basic income grant and have local governments and charities supply behavior-tested aid.

Ron Haskins on Work and Welfare

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He writes,

Significant advances against poverty in the coming years seem likely to depend on significant increases in paid work among the poor — and the reasons are not purely economic. Work means increased earnings, to be sure, which in turn would increase self-sufficiency, increase economic mobility, increase income in retirement, and reduce public expenditures on welfare and related programs. But work is more than just a means of income generation. Work also provides adults and their families with a time structure, a source of status and identity, a means of participating in a collective purpose, and opportunity for social engagement outside family life. A host of studies have connected joblessness to increased risk of family destabilization, suicide, alcohol abuse, and disease incidence, as well as reduced lifespan. Several large reviews of research conclude that unemployment not only reduces physical but also psychological well-being.

Read the whole essay. He argues that cutting off welfare benefits for people who choose to not work was a good idea, and we should do the same with food stamps and housing subsidies.

While he does not discuss a Basic Opportunity Grant directly, I think that his analysis clearly lines up against the idea.

Null Hypothesis Watch

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Emma Brown writes in the Washington Post,

One of the Obama administration’s signature efforts in education, which pumped billions of federal dollars into overhauling the nation’s worst schools, failed to produce meaningful results, according to a federal analysis.

Test scores, graduation rates and college enrollment were no different in schools that received money through the School Improvement Grants program — the largest federal investment ever targeted to failing schools — than in schools that did not.

But I imagine that from a teachers’ union perspective, the program has to be considered a success.

Web Site Revamp

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It will not affect this blog, but I am trying to better organize my overall web site. One step is to try to create a biographical page. One relevant bit, from a section on the evolution of my political beliefs:

Trying to rid humanity of all traces of tribalism is as futile a hope for the libertarian as it is for the Communist. So I end up somewhere between libertarianism and conservatism. Like a conservative, I believe that existing social institutions should not be casually tossed aside. Like a libertarian, I would like to see the state be much less ambitious.

Tribalism trips up all of us. Our new President said at his inauguration, “When you open your heart to patriotism, there is no room for prejudice.” He proceeded to say “buy American, hire American,” which I think should be described as prejudice.

The tribalism of the left is equally insidious.

Russ Roberts and Sam Quinones

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The most recent econtalk is one of the most fascinating episodes ever. It made me want to read Quinones’ book on the evolution of the opiod crisis. I’ll pick one random excerpt:

Oxycontin is a game-changer for another reason, not just how it’s marketed. … it takes people up to very, very large addiction levels, daily addiction levels, so you have to be doing 100, 200, 300 milligrams a day of these pills–that’s $1 dollar a milligram on the street. So, it’s 100, 200, 300 milligrams a day. Well, you can’t sustain that. There’s no way you can continue with that. So you begin to look for something very cheap and just as potent. And cheap Mexican heroin fills that bill perfectly. And their heroin fills that bill absolutely. And it’s easy to get. And it’s available. And they’ll give you free come-ons and discounts, etc. And so it’s that kind of encounter, between the heavy marketing of pain pills and Purdue Pharma, and …these heroin traffickers with this new system and this very cheap, very potent dope that creates the first examples of what we’re now seeing all across the country, almost in every state of the union. Which is: people getting addicted first to pills, and then transitioning to very cheap Mexican heroin.

Kling on Trade

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I wrote,

On the topic of international trade, the views of economists tend to differ from those of the general public. There are three principal differences. First, many noneconomists believe that it is more advantageous to trade with other members of one’s nation or ethnic group than with outsiders. Economists see all forms of trade as equally advantageous. Second, many noneconomists believe that exports are better than imports for the economy. Economists believe that all trade is good for the economy. Third, many noneconomists believe that a country’s balance of trade is governed by the “competitiveness” of its wage rates, tariffs, and other factors. Economists believe that the balance of trade is governed by many factors, including the above, but also including differences in national saving and investment.

The noneconomic views of trade all seem to stem from a common root: the tendency for human beings to emphasize tribal rivalries. For most people, viewing trade as a rivalry is as instinctive as rooting for their national team in Olympic basketball.

To economists, Olympic basketball is not an appropriate analogy for international trade. Instead, we see international trade as analogous to a production technique. Opening up to trade is equivalent to adopting a more efficient technology.

That was for the Concise Encyclopedia of Economics.