UKIP and Xenophobia

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The Washington Post reports,

Its best-yet showing in a national race has, nevertheless, thrust into the national limelight a political movement that is part of a wave of anti-immigrant populism surging across Europe. The outcome of the Feb. 28 vote, coupled with national polls showing UKIP support at an all-time high, seemed to terrify Britain’s three traditional parties.

I thought the UK Independence Party was about opposition to being governed by Brussels. Is the reporter’s characterization of the party as virulently anti-immigrant correct? Or is this an attempt on the part of those who side with Eurocrats to demonize their opponents?

Cass Sunstein’s New Book

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It’s called Simple, or perhaps Simpler (the letter r appears with a cross-out). Tyler Cowen says that Sunstein is always worth reading. In this case, I am unable to agree. The book is a retrospective on Sunstein’s time in the Obama Administration as “regulatory czar.” Its message is that he and his colleagues did everything right, and their critics either did not understand or were dogmatically partisan. On p. 5, he writes,

To resolve disputes about the likely effect of rules, economists are essential.

Two pages later, he writes,

Insisting on careful analysis of costs and benefits, we issued historic rules to increase the fuel economy of cars and trucks…

I think it is fair to say that many economic studies question the value of fuel economy standards. I am not saying that fuel economy standards are utterly refuted by economic analysis, but I would have liked to see a serious discussion of the literature on fuel economy standards, or at least a mention of the fact that they are controversial with economists.

I do not disagree with his view that regulation ought to employ economically sound principles. However, I do not think he has made a persuasive case that the Obama Administration made significant strides in that direction.

[UPDATE: Sam Batkins and Ike Brannon write,

Currently, when an executive agency proposes an “economically significant” regulation (meaning that its estimated effect on the economy would be $100 million or greater), it must submit a regulatory impact analysis (RIA) to OIRA for review. The current administration’s OIRA has returned for reconsideration precisely one regulation in its first four years, which suggests a lack of interest in regulatory oversight

]

Is the Demand for Skill Falling?

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Paul Beaudry, David A. Green, and Benjamin M. Sand have a paper with an intriguing abstract, which says in part,

Many researchers have documented a strong, ongoing increase in the demand for skills in the decades leading up to 2000. In this paper, we document a decline in that demand in the years since 2000, even as the supply of high education workers continues to grow. We go on to show that, in response to this demand reversal, high-skilled workers have moved down the occupational ladder and have begun to perform jobs traditionally performed by lower-skilled workers. This de-skilling process, in turn, results in high-skilled workers pushing low-skilled workers even further down the occupational ladder and, to some degree, out of the labor force all together.

If true, this would upset nearly everyone’s narrative apple cart, including mine.

Causal Density is a Bear

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The Economist reports,

The mismatch between rising greenhouse-gas emissions and not-rising temperatures is among the biggest puzzles in climate science just now. It does not mean global warming is a delusion. Flat though they are, temperatures in the first decade of the 21st century remain almost 1°C above their level in the first decade of the 20th. But the puzzle does need explaining.

On a separate but related topic, Noah Smith writes,

DSGE models are highly sensitive to their assumptions. Look at the difference in the results between the Braun et al. paper and the Fernandez-Villaverde et al. paper. Those are pretty similar models! And yet the small differences generate vastly different conclusions about the usefulness of fiscal policy. Now realize that every year, macroeconomists produce a vast number of different DSGE models. Which of this vast array are we to use? How are we to choose from the near-infinite menu of very similar models, when small changes in the (obviously unrealistic) assumptions of the models will probably lead to vastly different conclusions? Not to mention the fact that an honest use of the full nonlinear versions of these models (which seems only appropriate in a major economic upheaval) wouldn’t even give you definite conclusions, but instead would present you with a menu of multiple possible equilibria?

James Manzi’s Uncontrolled pinpoints the problem, in what he calls causal density. When there are many factors that have an impact on a system, statistical analysis yields unreliable results. Computer simulations give you exquisitely precise unreliable results. Those who run such simulations and call what they do “science” are deceiving themselves.

Two Long-term Trends in Education

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1. More administrators.

Administrative positions at K-12 schools increased by 700 percent since 1950 — seven times faster than the growth of student enrollment.

2. Fewer school districts.

We’ve gone from 127,000 school districts in 1932 to fewer than 15,000 today

In theory, the consolidation of school districts should reduce, rather than increase, the administrative burden.

If you multiply a 7-fold increase in administrators by an 8-fold decrease in school districts, we have seen a 56-fold increase in administrators per school district over the last several decades. That is, for every 10 administrators in a typical school district in 1950, there are over 500 administrators today.

What I’m Reading

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Building Home, a biography of savings and loan mogul H.F. Ahmanson, who flourished from the 1930s until his death in 1968. I had low expectations for this book, but I’m actually getting much more out of it than I did the widely-praised Hirschman bio, even though the latter is the product of prodigious skill and effort. Eric John Abrahamson, the author of Building Home, does a really good job of capturing the post-WWII political economy zeitgeist. On p. 115,

Thus the relationship that developed between regulator and regulated by the early 1950s was often collaborative and mutually supportive. Regulators believed that a major part of their job was to protect the health of the industry as well as the consumer or depositor. When changes needed to be made to the law, industry officials often drafted the new legislation, and legislators in Sacramento and Washington often accepted their recommendations with little other public input. When influential regulators retired, they often became owners, managers, or consultants to savings and loans. Meanwhile, many legislators owned shares or served on the boards of local savings and loans.

The conventional wisdom after World War II was that industry and government had collaborated to win the war, and that similar partnerships could address social needs, such as housing. Public trust in government and industry was high. Supposedly, we now live in an era in which there is much more polarization concerning the free market vs. regulation, and there is much less public trust in government and in corporate behavior. But re-reading the excerpted paragraph, how much has really changed in the last 50 years about the way financial regulation operates?

The business-regulatory collaboration extended to mortgage redlining. On p. 107,

In the 1930s, the Home Owners Loan Corporation (HOLC) had institutionalized the practice of racial and economic segregation in housing development and residential lending…Social segregation continued to permeate public policy during and after the war, and the FHA explicitly perpetuated racial discrimination in mortgage lending. When the Community Homes cooperative in Reseda sought FHA approval to finance 280 single-family homes in 1947, for example, it was turned down by the government because the cooperative refused to adopt racial restrictions.

The Soda Ban as Culture War

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Aaron Ross Powell writes,

if you drink 32 ounces of Coca-Cola, you’ll rack up 388 calories. A 20 ounce Iced White Chocolate Mocha from Starbucks has 500. Both aren’t good for you, but the Mocha’s worse. The difference is that the kinds of people who want to use government to save ignorant Americans from the harms of soft drinks are the kinds of people prefer an Iced White Chocolate Mocha to a Coca-Cola.

As Jonah Goldberg says, when it comes to culture wars, the left is the aggressor.

Are Libertarians Natural Allies of Conservatives?

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A reader writes,

The appeal of the civilization-barbarism axis to people seeing the world through a freedom-slavery axis is obvious. The use of force by the gang holding state power is a return to barbarism.

One way to think of this is that a conservative supports the use of state power only in defense of civilization and only under the constraints of rules and norms. The progressive supports the use of state power whenever it can promote what the progressive sees as good. For a libertarian, the conservative only appears to go off track by over-stating the threats to civilization posed by foreigners or by licentious behavior. However, the progressive appears to be off track in a more fundamental sense.

Another way to think of this is to ask when a libertarian might say, “I can go along with you philosophically, but empirically I disagree.” To a conservative, you can say that you agree that government should be on the side of civilization, but you disagree that civilization is threatened by gay marriage or open borders. That would not be insincere, although the strength of the disagreement might be high.

To a progressive, libertarians might say that they agree that government should help oppressed workers, but they do not think that the minimum wage achieves that goal. However, that would be a tactical statement, lacking in sincerity. The libertarian is not really prepared to say that if the minimum wage or other policies can be shown to help oppressed workers then such policies are legitimate.

Secretary Sebelius: Insurance != Insurance (paging Ezra Klein)

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She is quoted saying,

At a White House briefing Tuesday, Health and Human Services Secretary Kathleen Sebelius said some of what passes for health insurance today is so skimpy it can’t be compared to the comprehensive coverage available under the law. “Some of these folks have very high catastrophic plans that don’t pay for anything unless you get hit by a bus,” she said. “They’re really mortgage protection, not health insurance.”

My differing views are here:

The health coverage most Americans have is what I call “insulation,” not insurance. Rather than insuring them against risk, most families’ health plans insulate them from paying for most health care bills, large and small.

I would like to know Ezra Klein’s take on this. Some possibilities:

1. He is alarmed that such an important person and the aides who prepared her talking points are clueless, and he will write a column along those lines.

2. He recognizes that she is clueless, but he thinks it is not an important story. If so, perhaps he will leave a comment here explaining why.

3. He recognizes that she is clueless and that this is an important story, but this is not the sort of thing he wants to call to the attention of Washington Post readers. (This is the least charitable possibility, so it does not really belong on this blog.)

4. He has received a background briefing that “clarifies” her remarks, and he will write a column along those lines.

5. He himself believes that catastrophic health insurance should not qualify as health insurance, and he will write a column along those lines.