Archive for September, 2010

Chart of the Day

From Cato@Liberty.

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According to the AP, Congress is set to pass a law that would mandate standards equalizing the volume of programming and television commercials.  Specifically: 

Legislation to turn down the volume on loud TV commercials that send couch potatoes diving for their remote controls looks like it’ll soon become law.  The Senate late Wednesday unanimously passed a bill to require television stations and cable companies to implement industry standards capping the volume of commercials and equalizing the volume between ads and other programming.

I’m no fan of the regulatory state, and I don’t think the government should regulate how television stations and cable companies run their affairs.  If we don’t like the annoying volume differential between commercials and regular programming, we can stop watching those channels, stop purchasing products advertised in this way, or complain.  Or you can get even more radical (as I have done) and watch television shows late on Netflix, commercial free!  In other words, we can hope to effect change by exit or voice.   

However, such attempts run into stiff resistance due to the collective action problem – hence the allure of government (in other words, coercive) approaches.   

Although I’m not a fan of using the coercive power of the state, the equalization of volume seems to be a Pareto optimal move – unless we really think that advertisers or consumers benefit from such an annoyance (I would guess that it turns us off as much as invites us to buy products – but I’m no expert on marketing and don’t have the data in front of me to confirm or infirm my guess).  Therefore, this probably isn’t the worst thing the state could do.  Moreover, if such tinkering takes up Congress’ time and energy, it gives that august body marginally less time and energy to do really harmful things!

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Like many other people, I was underwhelmed by the recently released Republican “Pledge to America.” Longwinded, wishy-washy, and mostly tinkering on the edges.

I am not a member of the Republican Party (or any other party), and I am indeed one of those who fails to much difference of substance between the two major parties—at least on fiscal issues. There are differences on social issues, but, as I have argued before, those issues pale in importance to the fiscal reckoning that looms before us.

I am not alone in thinking this. In fact, I believe this cluster of fiscal concerns constitutes the core of what animates the Tea Party. It is what explains why they oppose some candidates, including some Republicans, and why they favor others, including some independents. Their surging influence gives me some hope that we might finally address this issue, and it is why I welcome their contribution.

But I am not here to defend the Tea Party qua party either. I want us to get our fiscal house in order—now. To that end, I humbly offer what I believe would be a winning, and indeed inspiring, agenda for an ambitious group of politicians.

Call it “The Principles of American Renewal”:

1. No new taxes of any kind.

2. No new spending of any kind.

3. An immediate, across-the-board 5% reduction in the budgets of every department, agency, bureau, institute, and program currently operated under the auspices of the federal government. That includes both “discretionary” spending and “mandatory” spending budget items.

4. Do the same next year, and then freeze all spending levels there unless a super-majority of both houses of Congress approves otherwise.

That’s it. It’s not much, but I think it has considerable virtues.

First, it does not require us to argue about which agencies, offices, etc. should be cut and which should not—cut them all, with proportionate equality.

Second, no one can claim, at least not credibly, that there is not at least 9.75% of fat (what two years of 5% cuts amount to) to cut in every single line of budget in the federal government.

The 2010 federal budget (October 2009–September 2010) entails spending $3.55 trillion dollars. So this policy would entail a 2011 budget of approximately $3.37 trillion, and a 2012 budget of approximately $3.20 trillion—a savings, after two years, of some $350 billion, bringing federal spending down to what it was all the way back in . . . 2008. Is anyone willing to claim that the federal government was just not spending enough in 2008?

Third, if Daniel Mitchell is correct (H/T Roger Ream), a policy like this would rapidly balance the annual budget, and it would be a good first step toward addressing our longer-term national debt.

Fourth, there are many, many households and business who have had to make similar adjustments. Many of them indeed have gone completely under and wish they only had to make a 9.75% adjustment over two years. So this pledge could enable its supporters to claim that they understand our economic difficulties and are willing to do their part.

There would be some obstacles, of course. This policy would require reform in some entitlement regulations, and special-interest groups would complain about their funding decreasing. But politicians could insulate themselves from the worst of the complaints by claiming, truthfully, that their hands are tied by the need for across-the-board reductions; no one is being singled out for special treatment.

A pledge to support a program like that, backed up with, perhaps, a promise to resign if a candidate voted otherwise, would, I preduct, be a winning one. If enough people got elected on it, it might also actually do some good in Washington, making it a win for the rest of us as well.

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Jonah Goldberg on education policy:

But is there another major area of American public policy that is more screwed up and more completely the fault of one ideological side [than education]? Which party do the teachers’ unions support overwhelmingly? What is the ideological outlook of the bureaucrats at the Department of Education? Which party claims it “cares” more about education and demagogues any attempt by the other party to reform it? Who has controlled the large inner city school systems for generations? What is the ideological orientation of the ed school racket? Whose preferred teaching methods have been funded and whose have been ridiculed?

Read more here: Liberalism’s greatest failure?. His post (like many on NRO) could be labeled as partisan ranting.

But it is also ranting that tells the truth.

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Kwame Anthony Appiah has a neat thought-provoking piece in the Washington Post that discusses what currently tolerated practices are likely to meet with future moral condemnation.  He argues that there are “three signs that a particular practice is destined for future condemnation”:

First, people have already heard the arguments against the practice. The case against slavery didn’t emerge in a blinding moment of moral clarity, for instance; it had been around for centuries.

Second, defenders of the custom tend not to offer moral counterarguments but instead invoke tradition, human nature or necessity. (As in, “We’ve always had slaves, and how could we grow cotton without them?”)

And third, supporters engage in what one might call strategic ignorance, avoiding truths that might force them to face the evils in which they’re complicit. Those who ate the sugar or wore the cotton that the slaves grew simply didn’t think about what made those goods possible. That’s why abolitionists sought to direct attention toward the conditions of the Middle Passage, through detailed illustrations of slave ships and horrifying stories of the suffering below decks.

Appiah proceeds to argue that the following meet this standard: our prison system, how we treat the elderly and the environment, and industrial meat production.  Ross Douthat and Will Wilkinson respond in kind – Douthat nominates abortion; Wilkinson, the nation-state system.

Tyler Cowen counters by asking “which practices currently considered to be outrageous will make a moral comeback in the court of public opinion.”

My nominee of a currently tolerated practice that will be seen as less and less morally acceptable is voluntary male circumcision.  It is a painful (some might say barbarous) ritual practice that has few proven health benefits (the most important of which, possible reduction of the risk of STD/AIDS acquisition, can be controlled through safe sex practices such as monogamy) and some serious potential medical side-effects.  Thus it is not surprising that the American Academy of Pediatrics does not recommend routine neonatal and has stated that “the procedure is not essential to the child’s current well-being.”  Moreover, male circumcision may diminish sexual pleasure in adult males and their female partners.  In the West, it is largely a product of the Victorian Era’s misguided sexual puritanism.

Circumcision (btw, Will W., this is not my personal hobby-horse) also fits Appiah’s standards quite well.  First, the arguments against circumcision are out there and growing.  Indeed, according to my wife’s OB/GYN, people on the coasts are engaging in the practice less frequently while the Midwest has been less comfortable with these changing sentiments.  Even more importantly, people are more aware of the barbarism of female genital mutilation (FGM) – and this compels people to think about male circumcision.  Indeed, my growing awareness of FGM was a contributing factor that led me to think seriously and more carefully about our own cultural practices and ultimately to decide not to circumcise my sons.

Second, defenders of the custom certainly use tradition to defend the practice (as in “My Dad is circumcised, I’m circumcised, so I’ll circumcise my kid”) or make a claim to necessity (“we need to do this to prevent the spread of STDs” – even though there are many other avenues to reduce the risk).

Third, supporters certainly engage in “strategic ignorance” – indeed, most people I’ve discussed this with never even give it a thought, and if they do, it is due to the pangs of possible regret as they watch their son go under the knife just after entering the world.

So, I predict that (absent new compelling evidence of serious health benefits) voluntary male circumcision will be seen in the future as a strange ritual of the less enlightened past.

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Many people (including me) take the ever increasing growth in government expenditures as a basic article of faith.   Over the 20th century, we had about a 23-fold increase in real GDP, but a 200-fold increase in real government expenditures.  In other words, from 1900-2000, federal expenditures grew at a rate nearly 10 times the growth rate of the economy.  This growth happened in surges.  In 1929 it was 2.9% of GDP, by 1939 it was 9.2%.  WWII and the Cold War brought more defense spending, and all federal spending has increased steadily since then.

One might expect that such an increase would have been accompanied by vast increases in the number of federal employees.   During some periods this obviously happened.  What I didn’t realize until I was looking at some figures today is that the growth in the civilian workforce federal workforce has, for the past several decades, not increased by that much.  According to the Factbook produced by OPM, the federal civilian workforce was 2.708 million in 2000 and 2.700 million in 2006.  According to another source, the Executive Branch employment (excluding postal workers) was slightly less in 2005 than it was in 1965 (and down 17% from the peak in 1990).

So government is expanding rapidly, but the government workforce hasn’t done so for quite some time.  What is going on?  The same Factbook gives part of the answer.  Over that same period from 2000-2006, the annual “base salaries” of federal civilian employees rose, in nominal terms, from $46,784 to $66,372–an increase of over 16% after adjusting for inflation.  This was not a demographic effect, since the average length of service actually declined slightly over that period.  Benefits, which are on top of the base, went up by even higher percentages, as did payments for health and retirement benefits for retired employees.

This six-year increase is a short period of time.  Trends like these over long periods lead to very big differences.  A swath of recent news stories has documented that public-sector employees get paid more than private sector employees, especially when benefits are added in.   These data suggest that gap is likely to grow.

If we think of “the government” as, loosely, the people who work in the government, then we have a clear and troubling story here.  Rent-seeking behavior by many interests have led to increased expenditures on those interests over the decades (since the Founding, actually).  This continues more or less unabated.  But while the scope of government is ever-increasing, the people in the government have stopped expanding the federal work force (it might have gone up given the surge in recent spending, but I don’t have data easily at hand on that question).  Instead, they have chosen to sharply increase their wages and benefits rather that spend increased funds on personnel that might actually improve the performance of government.  Furthermore,  because the expenditures per employee ratio has gone up considerably, the average influence of each federal employee is increasing as well.

As far as overall budget problems go, the federal payroll is nowhere near the problem that entitlements and defense spending are.  But we are talking about hundreds of billions per year in payments and, more important, a bureaucratic machine that is eating itself alive from the inside.  Elected officials have a relatively hard time raising their own salaries and benefits, but the bureaucrats who work for them have been largely immune from public scrutiny in this regard.

The outrageous bonuses and salaries paid to Wall Street fat cats from funds loaned by the government caused a lot of public anger (though directed at the wrong thing: the bailouts — which were absolutely necessary).  Compared to the regular fleecing of the taxpayer by the public employee unions in this country, the Wall Street bonuses are a pittance.

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It has long been commonplace to assert that income inequality has been rising in the U.S. since the 1970s. Following Marc’s post about Robert Reich’s book and my reply to Roderick Long’s argument for moral concern about inequality, I thought readers might be interested in a debate going on at the Economist over new data on U.S. income inequality. Will Wilkinson points up new research showing that the rise in income inequality has been overstated significantly due to the fact that prices for the goods that lower-income consumers disproportionately buy have fallen relative to other goods. He also offers another argument for lack of concern about income inequality as such:

To find that American income inequality has been overestimated is not to find that America’s institutions are closer to some moral ideal than we had thought. Were America’s highest marginal income tax rate a little higher, that would do nothing to reform America’s penal system, to moderate America’s nation-building habit, to reform its de facto apartheid public-school system, or to improve its vicious treatment of undocumented immigrants. Inequality is indeed a frequent side-effect of injustice, but it is benighted to fixate on symptoms to the neglect of the disease. The more time wasted arguing about relatively meaningless abstractions like country-level income inequality, the less is devoted to addressing what ought to be the sources of American shame.

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