Archive for April, 2010

Just about everything Paul Krugman writes nowadays is in some way related to rationalizing the Obama deficits. Now, Krugman’s a smarter man than I, but I think it’s pretty clear that his partisanship drives his economic analysis these days, rather than the other way around.

Yesterday Krugman turned a case against the euro into a mind-boggling attempt to justify Greece’s fiscal shenanigans over the past few years:

Right now everyone is focused on public debt, which can make it seem as if this is a simple story of governments that couldn’t control their spending. But that’s only part of the story for Greece, much less for Portugal, and not at all the story for Spain.The fact is that three years ago none of the countries now in or near crisis seemed to be in deep fiscal trouble. Even Greece’s 2007 budget deficit was no higher, as a share of G.D.P., than the deficits the United States ran in the mid-1980s (morning in America!), while Spain actually ran a surplus.

So because the U.S. ran a budget deficit of about 5% of GDP when existing public debt was about 50% of GDP, that makes it OK for Greece to run a deficit of just under 5% of GDP when existing public debt was about 100% of GDP? As for Spain and Portugal, the rigidity of their labor markets contributes to unemployment – and in Spain the popping of an enormous housing bubble has intensified the effect. He continues:

The problem is that deflation — falling wages and prices — is always and everywhere a deeply painful process. It invariably involves a prolonged slump with high unemployment.

Oh really? Tell that to economists who study the classical gold standard. From about 1880 to 1914, prices dropped on average 2% per year, even as the Second Industrial Revolution motored on. And here comes the inevitable payoff:

The deficit hawks are already trying to appropriate the European crisis, presenting it as an object lesson in the evils of government red ink. What the crisis really demonstrates, however, is the dangers of putting yourself in a policy straitjacket. When they joined the euro, the governments of Greece, Portugal and Spain denied themselves the ability to do some bad things, like printing too much money; but they also denied themselves the ability to respond flexibly to events.

Because everything has to relate back to defending the U.S. government’s unconscionable fiscal excesses. If Krugman really thought monetary pump-priming is always necessary to get a local economy back on track, he would favor abolishing the dollar and breaking the U.S. up into optimal currency areas.

More to the point, Krugman’s (lack of) concern about budget deficits is strangely selective. Back in 2004, he castigated the Bush Administration for “enormous” budget deficits and “irresponsible” tax cuts. So much for the objectivity of the scholar.

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Megan McArdle has a new post on the auto bailout that is 95% dead-on.  In short, she is less than impressed with its impact and notes that “We could have given each of the autoworkers $100,000 to go start over somewhere else, and still saved money on the deal.”  Of course, this is besides the point for the architects of the bailout since it wasn’t rational policymaking for the general interest that motivated the deal in the first place but politics pure and simple (involving what McArdle argues was “a pretty blatant handout to a powerful Democratic interest group.”)   

But the 5% in her post that is a bit off is her strange argument about the proper role of the state.  Namely, McArdle argues that “The role of the state is to prevent human suffering.”  Really?  There are a lot of different arguments a libertarian or conservative or anyone else could make for the state, but this seems like an odd one.  Even utilitarianism (the frequently hidden ethical structure behind the policy prescriptions of “objective” economists) doesn’t give this role to the state since it aims to maximize general welfare (which could imply some very serious suffering as long as it is outweighed by utility gains). 

And if “preventing human suffering” is the proper purview of the state, McArdle’s state would be quite expansive, especially since she didn’t say “minimize” suffering but “prevent” it.  Actually, I’m not sure a state could actually do that no matter its size given the less than ideal world we live in (in that sense, she would be trying, to use Voegelin’s phrase, “to immanentize the eschaton”) and the fact that governments would still be faced with trading-off the suffering of some to prevent the suffering of others.

Update: I should also mention that suffering itself might not be something we want to prevent entirely.  Don’t tell Virginia Postrel this, however.  She has argued: “Contrary to what you may have heard, the only sort of character suffering builds is the ability to suffer–a useful ability in a world where suffering is the routine nature of life but not a virtue that makes the world a better place.”

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Arizona Update

Kudos to the NY Times for publishing an op-ed defending the Arizona immigration law.  I say this not because I agree with the law or the piece, but I like it when the Times publishes pieces it clearly disagrees with (see their own editorial opposing the law).

The main point raised by Kris Kobach is that what SB 1070 principally does is give the state law enforcement authorities power to enforce federal laws.

We went through a long civil rights struggle in this country, and the federal courts were and remain very active in forcing states to enforce federal laws.  Now we have a case where a state wants to enforce laws that the federal government is lax in enforcing, and people who are usually mad at the states for ignoring federal laws are very upset.

I don’t like anti-immigration laws for several reasons I’ve already mentioned, not the least of which is that I worry about police abusing their powers, but I am intrigued about this notion that the states have to do the fed’s job for them.

Are there other areas of law where we have seen or are likely to see the same trend?

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Back when I was a callow youth (and Reagan supporter), I wrote a high school English paper arguing for the repeal of the 22nd Amendment.  Fortunately, I’ve grown up and now see the 22nd Amendment as a potentially helpful constraint on the accumulation and maintenance of power. 

But it was this piece of news that led me to thank our Founders for restricting the Presidency to natural born citizens.  My goodness – what a train wreck it would be to have Arnold Schwarzenegger, “The People’s Governor,” as the Republican nominee for President or as the President himself.  Worse than Ike over Taft!  We’d be back to Bush II’s big government conservatism – something that ought to be an oxymoron.

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One of the last all-male enclaves in the military will now be letting in women, according to an announcement by the Navy on Thursday.  I have mixed initial reactions to this.

Certainly, women make valuable contributions to the military, and I’d like women to have the same opportunities in the work force as men do (though I’ll save the topic of anti-discrimination law for another day).  Furthermore, there are definite benefits from moving to gender-mixed work forces.  There may be increased sexual tension, but my experience is that men tend to behave better in mixed company than when they are by themselves.

Maybe this really is a non-story.  The Navy would like us to think so.  One sub commander says,

We’re going to look back on this four or five years from now, shrug our shoulders and say, ‘What was everybody worrying about?'” said Bruner, the top sub commander at Kings Bay Naval Submarine Base in coastal Georgia, where the announcement was made.

On the other hand,

There were some protests, particularly from wives of sub sailors, after the military began formulating a plan last fall.

Supposedly, the protesting wives were concerned more about women taking jobs and advancement opportunities from their husbands, but one has to wonder if that was the real reason (since women are serving all over the military without organized protests by military wives).

One also has to wonder that if this is really no big deal, why the Navy has no immediate plans to put female enlisted personnel on subs.  Officers have considerably more privacy on subs than enlisted crew members do.  Mixing the sexes amongst enlisted sailors seems fairly problematic.

Maybe this is just the march of progress, but I have a couple of points I worry about:

  1. I think there are a whole host of gender-related issues that the military prefers not to talk about because they get a lot of pressure to be politically correct.  Certainly there is an ugly history (Tailhook, etc.) of sexual harassment in the military and in the Academies.  And in conversations with military people, I have heard reports that, in many cases, the physical performance standards for certain tasks are altered for women.  I doubt that these are significant  (and probably not relevant to being an officer in a sub), but I don’t think we know the full story.
  2. The worries of wives who have husbands on submarines shouldn’t be ignored.  And the families of the women put on subs also might have some legitimate concerns.   Military service can be very hard on families.  This move might make things even harder.

Lastly, this is odd:

The Navy declined several requests by The Associated Press to interview female sailors and cadets at U.S. bases about the policy change.

Hmmmmm.  Probably nothing to worry about.

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1.  Jonathan Adler on the new Arizona immigration law (and one of its authors)

2.  Satellite imagery of the Gulf of Mexico oil spill (and by the way, this accident could not have come at a worse time for those of us who favor expanded drilling)

3.  On Slippery Slopes and the New Paternalism

4.  Another silly government poster.  HT: Armchair Generalist.

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National ID Card

A national ID card should be resisted by the states and by us as individuals. 

Democratic leaders have proposed requiring every worker in the nation to carry a national identification card with biometric information, such as a fingerprint, within the next six years, according to a draft of the measure.

Fortunately, groups like the ACLU have already blasted the idea:

“Creating a biometric national ID will not only be astronomically expensive, it will usher government into the very center of our lives. Every worker in America will need a government permission slip in order to work. And all of this will come with a new federal bureaucracy — one that combines the worst elements of the DMV and the TSA,” said Christopher Calabrese, ACLU legislative counsel.

Unfortunately, I have a hard time believing a national ID card is not inevitable.  Moreover, the ACLU is wrong about one thing – we already need a government permission slip in order to work – it is called the Department of Homeland Security Form I-9.  And note what it requires.

HT: Jesse Walker

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