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Archive for June, 2011

Wal-Mart on the brain

I keep bringing up Wal-Mart in posts and comments, which is strange since Wal-Mart isn’t something pleasant to think about.   But I wish there was more discussion about the recent SCOTUS ruling in favor of Wal-Mart because that case brings up some critically important issues for the future of the American economy.  Though Wal-Mart was successful, the case still reveals how perilously close we are to a massive, court-ordered imposition of government-think on American business.

Writing on the case in National Review Online, Michael Barone says:

The conclusion I draw is that Ginsburg thinks the only fair way to run a large organization is the way government runs civil service.

All jobs should be numerically classified to eliminate “arbitrary and subjective criteria.” Promotions should be determined by written tests or seniority, not by managers choosing “on the basis of their own subjective interpretations.”

Managers should understand that they will face harsh scrutiny if they don’t hire and promote equal numbers of men and women and pay them all the same. Better just to figure out how to make your gender quotas and avoid any trouble

Battles over government budgets get a lot of press.  I wish there were more press on the much more pernicious effect of government’s meddling in the operation of firms.  Huge efficiency losses occur when government-think is imposed on business.  This happens through court decisions and regulations that most people don’t pay much attention to.  The Obama administration’s decision to try to keep Boeing from building productive capacity in South Carolina, a right-to-work state, is another egregious and unconstitutional example of government raising the cost of doing business.  Hopefully Boeing will be successful in their efforts.  Obama cannot push Big Labor’s agenda through legislation, so he is trying to squash the healthy competition between states that allows firms to lower long-run labor costs, even as they create more jobs.

I think our economy can thrive even with an inefficient, bloated public sector.  But the expansion of government’s sticky fingers into the day-to-day operations of businesses is much harder to overcome because it is hard to see and has consequences that are hard to measure. Sometimes political candidates talk about stripping away regulations, but neither party has ever shown an aggressive agenda for dismantling the regulatory state.

Unfortunately, most companies don’t have the resources to fight the government that Wal-Mart or Boeing do, so they just knuckle under.  The sad irony is that the Lefties promote these job-killing federal actions in the name of improving life for the working class.

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Worth Reading (and Not)

A few pieces around the internets that are worth reading:

1.  At the Chronicle of Higher Education, Mark Bauerlein discusses research suggesting that the lecture format is beneficial for students compared to progressive teaching methods.  As one paper notes, “Contrary to contemporary pedagogical thinking, we find that students score higher on standardized tests in the subject in which their teachers spent more time on lecture-style presentations than in the subject in which the teacher devoted more time to problem-solving activities.”  (This piece is a lot better than the one by his colleague that mocks Adam Smith ties in a rather juvenile fashion).

2.  A little dated, but this take down of ethanol subsidies is great.  Now we need him to write one against sugar protectionism.  Down with concentrated interests who gorge at the public trough!

3.  And in the “Not Worth a Read” category, David Greenberg – a historian at Rutgers who should know better – writes a thin critique of “isolationists” in the New York Times today.  Hasn’t this kind of simplistic “history” and inaccurate categorization of today’s critics of liberal internationalism/neoconservatism been written about a million times already?  And aren’t these types of pieces really just rhetorical bullying to prevent a serious discussion of American foreign policy?

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“Imagine There’s No Taxes, It’s Easy if You Try…” There are so many sour notes that must be passing through the minds of Beatles fans as they hear allegations that John Lennon may have become a conservative in the final years of his life.  As his former assistant recalls:

“John, basically, made it very clear that if he were an American he would vote for Reagan because he was really sour on Jimmy Carter.”

As you might expect, such allegation have provoked quite a response. See the coverage in the Telegraph and the attack on the messenger in the Nation.

Although I am somewhat skeptical, who really knows what Lennon believed in the final years of his life (his last album was a pop album with no real political content). Perhaps if we play Double Fantasy backwards we will find some clues…

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For many libertarians, the single most important policy reform today would be abolishing the Federal Reserve and replacing it with competing currencies issued by unregulated, private banks. Ron Paul has repeatedly introduced bills to abolish the Fed and has made the issue a key theme of his presidential campaigns. Many libertarians get involved in efforts to use silver as a medium of exchange, such as the Liberty Dollar and Shire Silver.

Why do so many libertarians think that abolishing the Fed should take such a high priority? Some economists have explored the history and theory of “free banking,” such as Larry White and George Selgin. But I suspect many libertarians derive their monetary ideas not from reading White or Selgin, but from Ron Paul or lurid, conspiratorial books like The Creature from Jekyll Island. One commonly encounters views such as, “The Fed is creating hyperinflation that will destroy the value of the dollar,” and, “The Fed prints money to fund the government’s war machine.”

It’s important to note that these views are not correct. The main way that the Fed creates money is by (more…)

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Here is a neat little video that shows some of the correlates of economic freedom.  BLUF: economic freedom matters for a lot of things we care about!

Update: I can’t get it to embed properly – so here is the link to it on Youtube: http://www.youtube.com/watch?feature=player_embedded&v=v1U1Jzdghjk

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Romney-Bachmann, 2012

There are at least a half dozen credible candidates to win the GOP nomination for President.  In fact there are so many that they are all unlikely to win.  But the most likely of the “unlikelies” is Mitt Romney—though I wouldn’t put any money on that prediction.  Perry is a threat and Christie is a threat, but none of the current crop is likely to topple him Romney from his front-runner status.

Should this prediction pan out, I think the politically prudent choice of a running mate is Michelle Bachmann.   I think she will make a run at Romney in the primaries and may win in Iowa, but I don’t think she has the organization or the reputation to go the distance.  She and Mitt will feud over his record on abortion and health care, among other things, but I don’t see that battle going nuclear.  He probably isn’t impressed with her, but if anyone is prepared to sacrifice his personal views for the sake of political expediency, it is Mitt Romney (he became pro-choice when it was expedient to do so and pro-life when it was expedient to do so).

What she will provide for him is rock solid support among the Tea Party base, enormous fund-raising ability, and the lack of a Y chromosome.   She is sort of the turbo-charged version of Sarah Palin.  She has all the qualities that made Palin a good pick, but not so many of the bad ones.  Palin lacked any sort of national experience or a grasp of the national or international issues.  Bachmann, on the other hand, has experience as a tax lawyer and has been in Congress for a decade.  Most important, she has been under the heat lamp of the national press for a long time.  They hate her more than they grew to hate Palin, but as a VP, her feisty relationship with the press will be good because it will draw press.  VP candidates are supposed to be pit bulls.  She is also reasonably smart and articulate (though with her share of gaffes), whereas as Palin is, though it is not kind to say, rather dim.  And, to boot, Romney-Bachmann will make the most beautiful ticket since, well, forever.

Just remember, you heard it here first!

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Postscript: I blogged a few months back on whether Jon Huntsman could pull off the nomination.  He is another Unlikely, probably very unlikely.   I do agree with Stanley Fish who writes the following today:  “Well-spoken, well-heeled, well-informed, smart, fresh-faced and cheerful, a good administrator, slightly progressive on social issues, conservative economically and savvy about foreign policy — Huntsman is an independent’s dream and the Democrats’ nightmare.”  Of course caring about electability isn’t a strong suit of the Republican primary voter (e.g: Christine O’Donnell, Sharon Angle, etc. etc.).  Indeed President Obama’s greatest electoral asset is the Republican primary voter.

Post-postscript: Because of their Utah ties, both Romney and Huntsman interest me, but I’m not a supporter of either of them.

Post-post-script: The other obvious contender for VP is Marco Rubio.  He would be a very advantageous pick and might beat out Bachmann.

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I recently ran a poll here to gauge support for the idea of giving voters with bachelor’s and/or doctoral degrees extra votes in elections. I ran the same poll on a non-political site to get an idea of support from the general public. Surprisingly, Pileus readers opposed the reform overwhelmingly, 82-18%, while respondents on the other site were slightly more supportive, with opposition running at 74-26% (31 respondents). In both polls I simply asked the question and did not offer any reasons for either side of the issue. The sample sizes are too small to draw terribly confident conclusions about the general public’s support for this proposal, but support does seem surprisingly high given that no Western democracy since the 1940s has given multiple votes to college graduates (Belgium and the United Kingdom formerly did so).

The impetus for the poll came from a discussion I had with Bryan Caplan, author of The Myth of the Rational Voter. Caplan finds that voters have strikingly different views from economists on many economic issues. The general public tends to suffer from anti-market, anti-foreign, and pessimistic biases. However, the more educated you are, the more likely you are to think like an economist (the smaller your biases on economic issues). In subsequent research, Caplan says that the effect is really one of IQ: smarter people are more likely to think like economists, and smarter people are also likely to get more education. Nevertheless, the logic implies that giving people with more education more votes will lead to better politicians and better economic policies. I argued that giving additional votes to more educated voters might actually be a popular change in the long run, if it were actually proposed and defended at length. Bryan thought that it would be overwhelmingly unpopular and essentially not worth proposing.

The precise implications of these poll results are up for debate, but it seems to me that support for some reform of this kind actually does have some base of support in the public, even when no logical or evidentiary support for the change is offered.

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