Showing posts with label liberty. Show all posts
Showing posts with label liberty. Show all posts

Thursday, March 31, 2022

Well At Least We Can Agree On This, Right?...

Here is a partial list of some things people commonly get wrong (by my judgment at least) yet believe in them with strong conviction and desire. Therefore, these are just a few examples of times when I disagree with conventional wisdom. 
  • Veterans are always human, sometimes (but rarely) heroes. I wonder how much mental anguish in veterans is caused by either an imposter syndrome (these people think I did something I did not do) or a guilt complex (these people don't know what ugly things I endured and perhaps contributed to). Veterans deserve reverence and sympathy, but we do a grave disservice to them when we dismissively and robotically admire them.
  • Localized industrial policy is very bad. This includes tax-increment financing (TIF), direct subsidy, government/private partnerships, and other favored-interest actions. The local darling in my neck of the woods is M.A.P.S. Like so many cases of local industrial policy, it suffers from a server case of Bastiat's "what is seen and what is unseen--just look at all the shiny things! There are two crucial and high hurdles for these public (i.e., taxpayer-funded) endeavors to overcome before we can believe in them: 1) there must be a clear market failure preventing entrepreneurs from seeing and acting to realize the positive gains to be had, and 2) the government must be able to identify and execute on these supposed investment opportunities.
  • There should be no government licensure for employment (especially law and medicine--those in particular are too important and nuanced to leave up to central planning). I've got strong economic and principle-based arguments against licensure while those supporting it typically rely on that it feels good and that an idealized government can correct a hypothesized problem (not even a market failure mind you). Yet my view is political poison because it takes the unpopular tactic of addressing people's fear through passive action rather than blatant pandering.
  • Edward Snowden is an American patriot and hero.
  • Almost all acts of state-level aggression (AKA, war) should be met with minimal retaliation if not appeasement and forbearance. This certainly cuts against human nature, but most secondary reactions in response to violent hostility are counterproductive. They make the world a worse place--overall, on net, all things considered. My follow up right there is not my attempt to qualify my view. Rather I am saying I am considering all the supposed benefits people offer as to why vengeance shall be mine! . . . we must stand up to belligerent aggressors. Too often the cost is not worth the cure, and the actions taken in response are just closing the barn door after the horse has bolted. The most I can say in defense of the typical defender of retaliation (too much play on words?) is that if one wants to maintain the world closer to how it is at the cost of how much better it could be, then fight every fire with fire. It is very hard to truly hold territory and control a people. And this difficulty grows more and more as human society advances. Initial victories for would-be rulers become short lived if not pyrrhic. The constant eye-for-an-eye, tooth-for-a-tooth state of the world keeps us in a local maximum, struggling to escape to higher peaks. I think Bryan Caplan says it well.
  • The following should all be legal with minimal to no interference from government: prostitution, recreational drugs, performance enhancing drugs, selling/buying organs, prediction markets, actual gambling (games of chance rather than skill), and basically everything else under the sun of If you can do it for free…. The list is what makes this item fully counter-conventional--very few will defend all of these items.
  • The motto “Safety First!” is basically nonsense. It amounts to trite virtue signaling. If it is your “highest priority”, then you are incompetent. It is simply not possible for this to be a goal. It is a constraint. Fortunately most of the time when used it is just there to help the na├»ve and fearful to be a bit braver. In this sense it is innocuous as far as a noble lie can be. But for God’s sake can we grow up and stop saying it or accepting it as a substitute for meaningful signal?

Things the major tribes actually do unfortunately agree upon: 

  • There is lots of speech that needs to be censored (e.g., hateful speech, disruptive speech, unpleasant speech).
  • We need to fund the police such that we have a strong and powerful police state
  • Government can and should solve the "problem" of big tech.
  • A safe world and a safe America requires a overwhelmingly strong, uber-engaged, and extensively involved U.S. military.
  • American farmers are a sacred group who need constant support especially to maintain the status quo. They should enjoy private profits and be afforded extensive social insurance against losses. 
  • The welfare and education and indoctrination of the young is a state concern and needs strong state intervention. Parents should only be left up to their own desires when those desires fully correspond to the state's interests (defined separately by the two biggest tribes, of course). 
  • Incumbent firms and industries need and deserve deference if not extra support. It is wrong that they might be challenged by newcomers and new approaches. 


Wednesday, March 30, 2022

The Progression of Air Travel Security Theater

It is as if the powers that be are playing an ever-escalating game of what can we make them do next

When I was a kid it was just speech codes: don’t say “bomb” or “gun” or you might be detained and searched. Maybe not allowed to fly that day. 

After 9/11 it was: “let’s take away their liquids, move the entry barrier back and search them good and hard before entering, not allow anything sharp, and of course let’s profile them until they call foul and then let’s pick on the most obviously innocent to prove we don’t profile.”

“Now what?” I can hear them eagerly ask. Then the shoes came off. “And let’s make them basically get strip-searched (remotely) while holding up their hands in the ‘don’t shoot’ position.” 

And of course with COVID it is: “let’s make them wear masks . . . forever?” 

It will stop when we stop letting the most fearful and the most fanciful fears drive all policy decisions.


Related: The Great Antidote - Gary Leff on Airline Bailouts and Travel. Pay attention to where he describes American air firms as being basically extensions of the federal government. The technical term is fascism.



Thursday, January 14, 2021

Yes, Master - 2020 New Year's Resolution fulfillment

You may not remember the before times, but I do. Way back then I had a conviction in a belief, that while I still do hold it, I must admit I was wrong to hold so strongly. I fulfilled my perpetual, annual New Year's Resolution in 2020 by changing my mind on just how easily willing people are to submit to authority when in a state of fear. Let me explain.

Although I am a student of history and well aware of the many cases of a populous submitting to the king, the conqueror, or the soothsayer promising protection for only the price of precious liberty and self-determination, I foolishly and naively did not connect that reality to my view (hope) for the current world. Time and place again throughout 2020 did I find that view shaken and proven faulty. 

There were recent, stark clues that should have told me the line would not hold. 9/11 and the terrorism threat of the early 2000s was but a hint of how quickly and thoroughly people would yield liberty and self determination in the midst of fear. In that case we traded away freedom for security and as the predictive aphorism goes got neither--just theater and blunt rules with unintended consequences and predictable government excess and abuse. 

Likewise in the financial and economic challenges of the last 25 years we saw populist calls for regulation and takings. We got both repeatedly and with greater gusto in each pass. Captured interests worked hard to draft the legislation and interpret the rules to favor vested interest and the status quo. The experts gave us bailouts and promises to never again . . . allow the wealthy and the powerful to face devastating losses. 

And then came a pandemic. I expected tyrannical nations would react harshly. I expected better from the nations of the free. The Higgsian ratchet is a powerful and reliable effect. This is true because FOOL (Fear Of Others' Liberty) and FOOM (Fear Of Others' Mistakes) are dominant forces in times of great stress. 

I believed that people, not just free people but all people, would gradually and eventually strongly resist and rebel against coercive, dictatorial edicts that did not just seem but were proved to be ineffective, unjust, inconsistent, and in many cases counter productive. While resistance occurred, I was and am still shaken with how little was offered. 

Perhaps I am being too harsh on myself. To be clear I am not advocating nor saying I expected violent resistance. That is not required to stop what we have seen. The popular will alone prevents or enables power from corrupting to this degree. So maybe people are making a practical tradeoff that I am not appreciating. To make a small example, masks and mask policies are often just a wink and a nod letting us go about our lives. In this fashion they are akin to Robin Hanson's example of the public drinker's brown paper bag.

Yet my reading of my fellow man does not make me think this the case. I see people truly scared and truly allowing if not endorsing the lockdown of free lives. Acquiescence is all the permission the powerful need to take more from others. 

If I were to put it into a 2x2, it would look something like this:



Fighting for freedom is the degree to which one will actively take actions against oppression. This is offense. Resistance to coercion is the degree to which one will impede oppression. This is defense. Both play a crucial role and are interconnected in an effective and just battle for liberty. 

Coming into 2020 I put Americans in particular and people generally on the blue line. My revised belief is that the typical person is on the red line--a decided shift away from where I once thought we were.





Sunday, December 6, 2020

Walter Williams, R.I.P.

 

Walter Williams, one of the greatest communicators and expositors of freedom and economics, passed away this week. While I never had the pleasure of being in his classroom, he was quite certainly a teacher to me. My first encounters with his work were reading his articles in The Freeman and his republished op-eds in the Conservative Chronicle as well as attentively listening when he would fill in for Rush Limbaugh. Over time as I became enlightened, with no small part guided by Dr. Williams, it was only his moments filling in for Rush that I would find that show meaningful.

He was a teacher directly to many teachers I have had including ones who entered his classroom avid Marxists and exited passionate free-market capitalists. 

I strongly encourage you to read Don Boudreaux's tribute to him in the WSJ as well as watch the short documentary, Suffer No Fools.

For more tributes, see this list.

May he rest in peace, and may his great work, wonderful spirit, and inspirational message live on.

Sunday, September 6, 2020

The Age of Fear


We live in an era characterized by fear as a dominating narrative and influence. The beginning of this era can be formally dated to September 11, 2001, but it began developing years prior. It continued and strengthened with the Great Recession. The fear of inequality drove both the Tea Party and Occupy movements. No proposed public policy solution escapes this phenomenon.  The Patriot Act, Sarbanes Oxley, the Affordable Care Act, Dodd-Frank, Trump's immigration actions and policies, are but some of the most notable examples. The Fed along with the macroeconomics profession and finance upper echelons has so feared inflation that we regularly get stagnant and slow recoveries.

At each turn we increasingly choose safety and security over the obvious risk and potential opportunity. Insurance in all forms is overvalued and desired especially at the expense of someone else. Bastiat's apt observation that "The state is the great fictitious entity by which everyone seeks to live at the expense of everyone else" has evolved into the state as the fictitious entity whereby everyone's risk is absorbed and destroyed at the expense of no one.

Now COVID-19 dominates our decision making. And the opportunists are always there to fulfill their portion of the bootleggers and Baptists story. 

Tyler Cowen has seen this developing for some time. We are not the little engine that could. Where are the people not just chanting but demanding that "the show MUST go on"? 

I am not arguing that fear and risk should be ignored. And it is not lost on me that our growing wealth and well being has dramatically changed the risk calculus for society--this is a good thing. But all risk analysis must be properly constructed, weighted, and continually reconsidered. Otherwise, costly errors will occur and compound.

As always, the future belongs to those willing and able to take and bear risk.

Friday, July 3, 2020

From Hong Kong With Love

We stand at the precipice of a great opportunity. The government of China is doing what governments do by going state on Hong Kong. The leaders there correctly perceive HK as a threat to their power and way of life. While I continue to predict that in the long run HK will eat China rather than the other way around, there are alternatives.

Many are suggesting a policy tool to challenge Beijing is to open borders to HK emigration. This is a classic tails we don't lose, heads we win situation. To wit: If China balks, HK keeps its autonomy and the progress of freedom marches on; if China digs in, we get a giant gift. I'm sure you can see the first case, but I expect the second case is a bit harder to swallow. Allow me to explain the benefits of Open Borders with this extreme example.

A few years ago I had the pleasure of visiting HK. Although I was fairly familiar with it, I was still completely amazed. I look forward to one day returning. At the time I planned on doing a post about the HK economy in comparison to my native Oklahoma economy. Unfortunately, I didn't get around to it, but I think I can quickly summarize one of the economic points I wanted to make: 

Hong Kong is 138% more productive than Oklahoma and most of that difference is because of population. The average Hongkonger is only 25% more productive than the average Oklahoman. And that is despite/because HK has much less land area on which to work. Key takaway: More people equals more opportunity.

(sources below)PopulationArea2019 GDP (PPP)2019 GPD per capita (PPP)
Oklahoma3.95 million69k sq miles$206 billion $52,150 
Hong Kong7.45 million1k sq miles $491 billion $64,928 
% difference89%-99%138%25%

My extreme example to illustrate the benefits of Open Borders begins with a bold proposition: I propose we open the borders of Oklahoma to ALL residents of Hong Kong to become permanent guests with the opportunity to become citizens if they so wish. 

I can already hear the dismissive laughter followed by the panicked apoplexy. "Dear God, you can't be serious!"

Of course I am! This is easy. Do you think there is something magical about the small island of Hong Kong? Well, there might be, but it is nothing a little policy changing can't fix. And fortunately Oklahoma is not too far off from the HK freedom trail. 

"But wouldn't that influx crash the local economy? Think of all those mouths to feed."

Yes, and think of all those hands to work and minds to think! 

The one big stumbling block to a massive migration like this would be finding a place to house all the people. Well, Oklahoma has 69 times as much space as HK and construction here is cheap. 

Not convinced? The heart of my extreme example is how this would affect my personal employment. When I was in HK, it was for a couple of CFA Institute conferences. While there I was treated to a personal tour of part of the city by the president of the Hong Kong CFA society. We had a chance to chat about our relative societies--I was president of CFA Society Oklahoma at the time. His society was one of the world's largest with about 6,700 members. Mine was one of the smallest with only about 170. 

So what would happen if 6,700 CFA charterholders began migrating to Oklahoma? Would there be pressure on my job? Probably not immediately as people aren't as interchangeable as classical economics assumes. Over time there would be competitive pressures, but so too would there be competitive gains. With that massive increase in talent would come much in the way of business opportunities. I would have new job offers as well as a bunch of new job competitors. Would the net effect be to lower my wages? Maybe, but even here there less to worry about. 

The median total compensation* for a charterholder in HK is about 4% higher than for a charterholder in Oklahoma. While the cost of living in HK is perhaps 67% higher than in Oklahoma, most of that is housing, which remember is much easier to come by in OK. And for those like me who own a home, this influx should greatly increase my personal wealth. 

Think about it this way: Should current charterholders in HK want more or fewer charterholders in HK? The instinctual answer is as simple as it is wrong--fewer sounds good until you answer the question of how would there be fewer. A shrinking market for any type of employment is not good for those in that line of employment. As a native charterholder I stand to gain much if other charterholders want to migrate to my community. The likely worst-case scenario isn't that I lose my job and/or take a massive pay cut. It is that my job changes and new opportunities force me to make some changes. Change is scary, but change is inevitable. I would much rather have the trends of change as tailwinds than crosswinds much less headwinds. Growth is good.

Open borders in Oklahoma for Hong Kong citizens is unfortunately not going to happen. And even if it did, 8 million people would not show up tomorrow. In fact, most would choose not to make the journey at all. But for those that did it would be a great benefit for those already in the place of their reception. 



Sources for data in table: 
*CFA charterholder compensation data is from CFA Institute's 2019 Compensation Survey, which is proprietary to members--unfortunately, I can't directly share it.

Wednesday, April 1, 2020

The Defining Debate of Our Time

The most important debate we should be having and must have eventually is under what circumstances, to what extent, and by whose authority shall we "lockdown", "shutdown", "shelter-in-place", "stay home", and otherwise stop allowing others to live life.

I applaud those thinking critically about this. We need more. Here are some examples:

Roman Pancs via The Big Questions

John Cochrane

Arnold Kling

The Reason Roundtable - this is where I really expect a long-term best efforts, and this might finally be The Libertarian Moment.

Monday, January 15, 2018

Trump - One Year In

About a year ago, I posted on Trump looking at what I saw as the reasons to be optimistic and pessimistic. Let's revisit that now that we have a year under our belt.

Overall, I think my predictions were good with some notable variance in a couple areas. Of course, I was vague enough to prevent too much inaccuracy (or accuracy) by design. Here are the areas that standout to me with a look back at my prior comments.

The Good

  • Taxes - this one was somewhat surprisingly good, blemishes and all. [remember with all of these we are grading on a curve] Much like Chance, Trump only gets credit for being there to sign the bill. 
  • Regulation - 1.25 steps forward with 1 step back is still progress. Congress and Trump completely failed to reform much less repeal the ACA (Obamacare). I have low and ebbing faith Dodd-Frank, et al. will be meaningfully changed. Still, there are success stories, and slowing the rate of growth is itself improvement
  • Judicial Appointments - I somehow missed mentioning this previously, and it would have been in the optimism bucket. This one has lived up to realistic (not full libertarian) hope. 
  • Lost Respect for the Sanctity of the Office - yes this is a feature--let the scales fall from your eyes, the emperors have never been well dressed. But . . .
The Bad
  • Presidential Power & Authority - we may be chipping away at the Cult of the Presidency, but I don't yet see the groundswell from the left or the center that I might hope for. They are much to tied up in the emotion of this particular president's actions and words.
  • Immigration - unlike in trade (below), Trump's actions have matched his rhetoric in this area. Here it looks to be an on-going real fight and will perhaps be the most lasting and impactful negative consequence of Trump.
  • Trade - as I mentioned, his administration is a lot of (bad) talk on this, but so far little action. Still, he has many opportunities to make good on his very bad desires.
  • War - I was not pessimistic enough on this. Drone attacks have increased under Trump as the list of places we are at war have grown. The U.S. government with the help of a complicit even if blissfully ignorant populace continues to be wrongfully aggressive. Include in this the surveillance state, but I am fairly certain this one is sadly nonpartisan. 
  • Drug Policy - yep, unfortunately I nailed this one.
The Ugly
  • Hatred, Nationalism, Bullying, etc. - I was not as pessimistic as I should have been in this general area. The downside of losing the always undue respect for the U.S. presidency is that it took this buffoon to get us there. He is at best sloppy and inconsiderate, at worst hateful and demagogic. If you need links on this topic to prove the point, you have been in a coma for 12+ months.
On balance there are reasons to claim "silver linings" and reasons to claim "not so fast".

PS. For a better analysis of the economic policy results of Trump's first year, read Scott Sumner's take

Thursday, February 23, 2017

Update on the Once and Future Tsar

Well, we are one month into the greatness. And it has been stellar!

Steve Palpatine Bannon finally spoke using his own voice instead of the orange puppet. Spoiler alert: Anyone who proudly speaks of 'economic nationalism' isn't going to win the Shazam Prize in Economics

He laid out three pillars of Trump's plan, and two out of three were bad. He starts with national security and sovereignty--we know how that has gone so far. Next comes the same type of thinking applied to trade--you see, kids, menage a trois (or menage a beaucoup when plus de deux) is bad in trade. Lastly is a promise that I would like to see come to play out, 'deconstruction' of the administrative state--can we count on this crew to pull anything like that off? I am highly doubtful. I believe they lack the ideological integrity to follow through or the intellectual acuity to be successful. My guess is that they want the administrative state to work for them rather than to truly reduce its breadth or depth.

What about Dodd-Frank and Obamacare reform? Well, where is the Republican Congress? They are the only chance at that. Meanwhile we lose ground on immigration, drug policy, and asset forfeiture. School choice, reversing net neutrality, and satire are among the areas that still have a good degree of optimism for progress. 

We will see...

Wednesday, January 25, 2017

Walls? Walls! We don't need no stinkin' walls!

Partial list of nations and empires with famous walls:

China: The Great Wall
Germany: Berlin Wall
Israel: Israeli West Bank barrier
Roman Empire: Hadrian’s Wall
Roman Empire: Walls of Constantinople
Jerusalem: Western Wall (AKA, Wailing Wall)


Partial list of great American bridges.

Golden Gate
Brooklyn
Chesapeake Bay
Seven Mile
Rio Grande Gorge
covered bridges in Madison County
Multnomah Falls footbridge


You can argue about which actually make it in the list. Name the great American walls. The Vietnam Wall is the only one that comes to my mind--a wall very different than walls as we think of them.

We have always been a nation that built bridges. Freedom works. Trade works. Immigration works.

Friday, January 20, 2017

The Age of Trump

Tomorrow one third of the United States' government leadership will change hands from one who once promised hope and change to one who now promises the same but supposedly of a different variety.

The tension around this transition is particularly elevated. Not since Hoover-Roosevelt has a U.S. presidential interregnum been so ugly. How will the final moments play out? Will Obama be gracious or will he smugly toss the football? Will the White House be adorned with golden accents? Will a great wall emerge protecting us from things we'd like to buy and people we'd like to meet? How great shall our greatness be?

Below is a partial list of my areas of optimism and pessimism as yet another self-greatness seeking charlatan proceeds to chase away our ideals.

Before I begin, a quick look at the optimism/pessimism I predicted about one year ago when Trump was but a surprising front runner though still a dark horse.
Optimistic - Shows why we should lose (and should have lost a long time ago) our reverent awe for the U.S. Presidency; prevents major government action/intervention/meddling on any number of issues by being a circus act writ large (his administration's priorities will be prestige and showmanship rather than policy accomplishment); forces a meaningful debate and action on limiting executive power (a little bit in tension with the previous prediction as this one mitigates a Trump administration that is actually trying to do something).
Pessimistic - Engages in major international war actions (beyond the high amount the each of his opponents would do anyway); sets back trade freedom and immigration substantially; creates strong racial, ethnic, nationalistic, and gender divides.
Overall - I estimate the optimistic possibilities are more likely than the pessimistic possibilities. 
 Optimism:

  • Taxes - As with many of these, Trump himself is not really the source of optimism. Rather the Republican Congress is the new hope. Trump is just the chance that a good reform will be drafted with the expectation that he will sign it into law.
  • Regulation - He continues to talk strongly about reducing the monstrous regulatory burden our federal empire exerts. The areas of particular expectation are banking & finance (Dodd Frank) and health care/medicine/insurance (ACA/Obamacare), but also environmental; although I am less sanguine about the prospects there. 
  • Presidential Power & Authority - This one is borrowed my original. I believe the return of the left is long overdue in this area. Perhaps it will take this time... doubtful. The same can be said for the anti-war movement. Their 8-year hibernation is now over. Remy puts it well in the second verse. 
There is no doubt these are important areas; yet, so are those I put in the pessimistic camp.

Pessimism:
  • Trade - Astute readers will notice how many of these in the pessimism category are related. Is his rhetoric enough to satiate the unintentional, populist desire to be poorer? Our trade deficit/capital account surplus is not some phantom menace plaguing our economic well being. Is he really so dense as to believe the nonsense he speaks on this issue? . . . based on the rest of his behavior . . . Okay, good point.
  • Immigration - The free exchange of labor is every bit as important a contributor (perhaps even a greater contributor) to our economic wealth as is the free exchange of goods and services. His attack on those not from around here is both disgusting and discouraging. Again, I hope this is a clone of the prior item where it is all about rhetoric and not action.
  • Nationalism - We don't need more tribal thinking in this world. Unfortunately, he nurtures this toxin. He wants revenge on those not allowing us to be great.
  • War - Here my outlook is just slightly negative. I'm grading on a curve based on the past two Commanders in Chief. I think he will tend to reduce the areas of conflict where both Bush and Obama took us. However, the risk he runs of allowing an awoken force from Russia or China is elevated compared to the prior administrations. Think reduced magnitude across the bulk of the probable war fronts but with increased risk in the extremes (tail risk).
  • Drug policy - I suspect he views drugs in the traditional simplistic framework (good versus evil). Drug users are rogues who must be dealt with. The first one to tell him he can't win the war on drugs will seal our fate in continuing the evil work that is that battle.
  • Government Meddling - From the Carrier deal to GM to you name it, the picture so far is bad for economic growth specifically and bad for liberty in general.
  • Free Speech - For as much as he deplores PC, he certainly can't take criticism. He has flat out said we need to reign in speech. 
  • Internet freedom - This may be a small issue, but perhaps it is a litmus test for how he will govern overall. He said we need to look into 'closing that Internet up'. His nominee for Attorney General, Jeff Sessions, as well as his vice president, Pence, are outspoken in their disdain for internet poker. They want to keep us safe . . . from ourselves and our choices.
  • Surveillance State - I suspect no relief. 
  • Gender Issues/Tolerance - While I actually think he actually takes a lot of unfounded and unfair flack regarding areas like race and sexual orientation, his sexism is undeniable. He is not just crude. He is misogynistic. It is hard to be very trusting that this strong character flaw and his errors in judgment don't and won't extend beyond objectifying women. 
Overall:

The Trump years (and they will be years despite the hope of so many for impeachment or that he would divorce America to be president of some younger Eastern European country) might be an odd combination of dramatic progress and colossal retreat. I think the eventual decisive factor will be how strong and righteous Congress is. I believe the case for optimism has a greater magnitude than the case for pessimism, but the negative sensitivity is high--meaning prospects are skewed with more downside risk than upside potential while the balance is still to the upside. 

Sunday, December 20, 2015

Highly Linkable

Let's start with a trip out of town. Got your playlist ready? Sherman, to the Way Back Machine!

Read Jeffrey Tucker's sensible, thoughtful perspective on terrorism and its two great horrors.

Speaking of terrorism, here comes Adam to ruin everything. (HT: KPC)

A top candidate for the most disruptive technological breakthrough of the the next two decades is driverless (or less human driven) cars. The Atlantic has a good discussion of the two approaches driving this disruption.

Scott Sumner summarizes much of what is misunderstood in thinking about monetary economics. This is a bit wonkish, but keep in mind this: getting monetary policy correct is very probably VASTLY more important for your well-being than who wins the next presidential election. The combination of [insert the major candidate you are most opposed to] and good monetary policy is >>> [insert your favorite major candidate] and bad monetary policy. It is not even close.

The Market is a beautiful wonder, and the benefits of free exchange are truly immense. Consider as Cato at Liberty's Chelsea German points out discussing Andy George's projects how expensive a suit or perhaps a simple sandwich would be if we didn't have market exchange. When we limit The Market, we should do so with careful concern and minimal impact.

Assuming we cannot find a strongly compelling reason to prohibit an exchange, a good rule is: If you may do it for free, you may do it for money as Jason Brennan and Peter Jaworski point out. This would include some outcomes that we might at first glance find troublesome but upon further inspection would analyze to be quite beneficial (albeit counterintuitive) as Liberty Street Economics points out when considering payday lending.

One of the key ways the market works its magic is through the price system. An effective market needs an effective price system. It is a remarkable method of capturing cost. Substitutes for that system are quite inferior as in the case Arnold Kling points out discussing locavorism.

Tuesday, June 16, 2015

Highly Linkable

Aziz Ansari says we're lookin' for love in all the wrong places and in the process channels his inner economist.

This is an awesome new project on Hayek by Don Boudreaux. Be sure not to miss the short videos.

Life is getting better, one thread at a time . . . Project Jacquard by Google.

Alberto Mingardi argues that locavorism is anti quality and anti quantity of life.

Charles Murray wants us to fight (federal) city hall. Arnold Kling dissents insisting exit rather than voice is the answer.

"Scott Alexander" breaks down the California water problem very well and offers some good ideas for solutions.

John Cochrane takes to task Richard Thaler and behavioral economics.

"Minimum wages are great . . . except for us," says LA County union leaders.

Scott Sumner explains how people get confused about monetary policy thinking of it as credit policy. No matter how much cash Apple acquires, it cannot conduct monetary policy.

Bryan Caplan has a simple request: unlock the school library.

I find counter-conventional wisdom delicious--in this case literally so. As illustrated in this Bloomberg article, barbecue impresario Meathead Goldwyn can tell you everything you are doing wrong on the grill (for me it was several things and counting). And he applies science and logic to the process. Bon Appetit!

Sunday, August 24, 2014

Highly Linkable

These people and their miniature worlds are so tiny. I'm crushing their heads! Be sure to hit the video at the end.

Megan McArdle asks us to take a moment to marvel at the kitchen wonders some of us (humans) enjoy today.

The rest of this link post is brought to you by Don Boudreaux (directly or via hat tips).

On the 69th anniversary of inexcusable brutality, Boudreaux asks us to remember and remember how conservatives felt about it at the time.

I relate very, VERY much to Sheldon Richman's sentiments in this post.

George Will rightfully takes to task those who would paint inverting corporations as unpatriotic. I love the conclusion:
This illustrates the grandstanding frivolity of the political class. It legislates into existence incentives for what it considers perverse behavior, and then waxes indignant when businesses respond sensibly to the incentives.
Matt Zwolinski has five important moral (and economic) points about payday lending.

The free market is filled with something even better than tolerance--indifference.

Here Boudreaux offers not just a strong argument against cronyistic policies like the Ex-Im Bank but also a strong argument against the minimum wage. To wit: why is it consumers' job (or in the case of the minimum wage, employers of low-wage employees' job) to compensate the "victims" of foreign subsidies (low wages)?

Just how dangerous is it to be a cop? Daniel Bier answers. (SPOILER ALERT: not very).

Tuesday, August 12, 2014

Do We Want To Live In A Third-Best World?

I listened to this NPR story on my way home from work today. The basic facts quickly:
  • A disabled man uses marijuana for medicine. He says it works better than anything else for his symptoms. 
  • The man lives and works in Colorado where the state law allows medical marijuana and where state law prohibits discharging an employee for lawful activities conducted off work premises.
  • The man works for Dish Network, does not use pot while at work, and does not come to work high.
  • Dish Network conducts periodic random drug tests that screen for marijuana, and the test it uses can detect marijuana's THC compound days or even weeks after actual use (the story is slightly murky on this, but I believe it is the case).
  • Dish Network dismissed (fired) the man after his positive test result.
This got me thinking about the world according to a libertarian. Here is the breakdown:
  • In a first-best world marijuana is fully legal. Employers can freely choose to employ or not employ people at their will including considering if they use marijuana on or off premises. Different firms have different policies and people (customers, employees, and everyone else) respond to those policies by respectfully agreeing or disagreeing, engaging or disengaging, and supporting or protesting. This way norms tend to work themselves out and adapt over time. The evolution is completely based on persuasion rather than force. Where disputes come up about rights (always a conflict of negative rights since positive rights do not exist in libertarian utopia), those are handled by a common law process. Again, it is evolutionary from the bottom up. Sadly, we do not live in this world. 
  • In a second-best world marijuana is mostly or fully legal. Employers must adhere to rules governing their conduct as set by a combination of common law and local legislated law, but these rules that emerge from this process are few in number and necessarily local in scope and encumbrance. The relationship between employer and employee is adaptive since it is governed some by rules imposed externally but mostly agreements made between the two parties internally. You'll never have that kind of relationship in a world where you're afraid to take the first step because all you see is every negative thing 10 miles down the road. Hence, we do not live in this world either. 
  • In a third-best world marijuana is mostly illegal. Employers are strictly governed by a multitude of rules set both locally and nationally with little of it coming out of a common law process. These rules are often in conflict with themselves as well as political tensions that dominate at different levels. The environment is ripe for lawsuits since so much is unclear and arguable. And those suits have little hope of bringing precedent-setting resolution or clarity for future disputes. Nothing is ever settled and almost nobody is ever happy with the results. The clarion call for a solution demands a top-down, one-size-fits-all approach that is as arrogant as it is unjustified. Sadly, we live in this world. 
While we work towards a better world that I do believe we can achieve (to wit: No matter what anybody tells you, words and ideas can change the world), we must settle for something less perfect. I hope Brandon Coats prevails in his case under state law. I hope the federal government takes a step back from the employer-employee relationship rather than offer its unhelpful solutions. 

We don't have to live in a third-best world, but it will take people learning to think for themselves. Your move, chief.

Tuesday, July 29, 2014

WWCF: Sea To Shining Sea - Pot Freedom or Marriage Equality?

Which Will Come First?

50-State Legalization of Marijuana

or

50-State Licensing of Same-Sex Marriage


Let's be clear: both of these are coming and soon. Let's be clear as well on our position: it is a good thing. The magnitude of the first is substantially larger in terms of causing good. Ending this significant front in the evil War on Drugs will bear much fruit. The magnitude of the second is substantially larger in terms of indicating good. That society and its institutions are nearing a point of accepting and dare I say celebrating the choices and joys of others says volumes about where we have arrived morally and intellectually. Before we move on to the prediction side of this post, let me lay one more point down: one does not have to morally agree with either the use of marijuana or the act of homosexuality to still reach the moral conclusion that we (individually or through the government) have no right to use force to disallow either one. The first-best solution is for the government to play no role in either one of these peaceful activity/association.

It may seem obvious to some that a U.S. presidential candidate will campaign on legal pot for every chicken quite soon giving marijuana the upper hand. After all, the New York Times now supports it. Indeed as their new series puts it 37 states representing about 76% of the U.S. population current have liberalized marijuana laws. But in order for this race to declare a winner, the subject must be fully legal and recognized both within each state and federally. It is just a matter of time before Colorado or Washington residents see just how illegal marijuana still is within their borders. Oh, wait, it already happened...

Still, the trend is undeniable on the marijuana front. And when one looks at the state-by-state prohibition of state recognition of same-sex marriage, one sees significantly more opposition (see the chart at the bottom of the link). Yet, the trend here is both certain and strong. 

What really puts same-sex marriage ahead of the game is the fact that it has been scoring victories in the courts, and that really gets to the heart of this WWCF including why this isn't a fair fight. Marijuana is still the outcast. It is the humorous back story in the R-rated movie. Same-sex marriage is the lovable story line in the family-TV comedy

The ultimate force driving same-sex marriage ahead in this race is that while it literally needs governmental approval to exist, marijuana only needs governmental tolerance (or impotency in the face of economic forces more powerful than puritanical desires). The fight for marijuana legalization relies much on the unseen (the benefits of ending prohibition). The fight for same-sex marriage relies much on the seen (the people denied benefits).

I give the edge to same-sex marriage and I predict we'll have both realized (nation-wide, state and federal) within a decade. Freedom wins! Freedom wins! Freedom wins!

Cross posted at Liberty.me.

Saturday, July 5, 2014

Communication Breakdown

I have been thinking lately about steps one can take to advance the cause of liberty. Early July is an appropriate time for this type of thinking, but there is never a wrong time. I'm thinking about small steps rather than a stairway to heaven, and it probably has to begin with how we converse with those we seek or should be seeking to win over.

With a nod to Arnold Kling's Three Languages of Politics, most of our efforts to communicate with our ideological adversaries float like a lead balloon. Libertarian arguments often strike conservatives and progressives as poison by reinforcing their respective fears of barbarism and oppression. Allow me to propose some antidotes. Please note that these are antidotes with limitations. The conservative so afflicted as to be a moral crusader and the progressive so burdened as to be against private property are beyond this proposal's reach.

For conservatives the narrative needs to focus on responsibility. We should show how people should be treated as responsible to make decisions for themselves regarding issues like drug use, gambling, and marriage. The responsibility angle already works for conservatives when considering issues like welfare--an able-bodied person should be ultimately responsible for his own well being and individuals should be responsible for charity. We can extend that framework to include other issues. An adult should have the responsibility to decide for himself what chemicals to put in his body, when to engage in games of chance, and who to partner with in marriage.

For progressives the narrative needs to focus on empowerment. We should show how people should be empowered to have more choice in where to send their kids to school, greater flexibility in the terms of their employment, and more options in how to save for retirement. Specifically, we need to show how our favored policy responses will help the most vulnerable.

While these techniques will not work on all issues (at least not in isolation), they may well advance the effort on many important issues.

cross posted at Liberty.me

Saturday, May 10, 2014

Highly Linkable

Last Saturday, May 3rd, saw the passing of a giant in economics, Gary Becker. Becker was one of the first economists I got a regular exposure to via his column in BusinessWeek. I immediately found an intellectual home in his economic wisdom. David Henderson memorializes Becker here. Russ Roberts remembers him here. Cass Sunstein reflects here.

Assuming the standard arbitrary delineation of the economy into parts, there is perhaps now a new "largest" one.

Josh Barro puzzles over why anyone would want to be a homeowner. Steven Landsburg offers a good critique of Barro and a valuable overview of the issues involved. Megan McArdle counters to a slight degree. With a nod to Arnold Kling, there are major problems with leveraged homeownership as the primary middle-class asset: owning an asset that by its nature is depreciating--try as you might to fight the tide via HOAs and monitoring city council meetings, at the end of the day you're planting flowers as the local factory closes. King Canute could relate as the former actions are immaterial relative to the latter, exogenous, effects. And the latter doesn't have to be a local economic shock like a major employer leaving town. That is just a stand in for depreciation in general. There are two forms of depreciation: wear and tear and out dating. As you perfect taking care of the former, you risk maximizing the latter. At some point you have completely rebuilt an outdated house or you have chosen an expensive way and place to build a house brand new--an interesting spin on the Ship of Theseus paradox.

On a related personal note, I have two friends about to realize a big dose of depreciation in similar ways. One is going to nearly fully replace his heat/air system and the other is going to fully replace both sides of his two-unit heat/air system. The first is looking at about $5,000 in cost while the second will see about $13,000 in cost. All that just to get back to even so to speak--nothing different to show for the huge purchases.

Caplan is playing matchmaker between Western Civ and Open Borders.

Jeffrey Tucker says P2P will prove to be a death blow to the state.

Questioning the conventional wisdom in two examples: (1) saturated fat does not or at least may not cause heart disease, and (2) race perhaps is genetic and is not a social construct.

Humanity has officially jumped the shark. Of course, we knew Las Vegas would be in on it.

Saturday, April 26, 2014

What Basketball Strategy Can Tell Us About the Growth of Government

I believe there is a fundamental flaw in the U.S. Constitution and federal government structure. As foresightful as the founders were, they failed to appreciate the tenacity and momentum of government's reach for power. Allow me to illustrate with an analogy:

Some time ago basketball coaches realized there was a strategy they could employ to give them a systematic edge over opponents. What they realized was that while physical contact to gain an advantage over the opponent is generally prohibited in basketball, not all fouls as such were called. What's more, the referees exhibited reluctance to call fouls beyond a certain threshold. So a game with 100 fouls in it would only result in perhaps 40 fouls being called (40%) whereas a game with 50 fouls in it might result in as many as 30 fouls being called (60%). Therefore, a team that was naturally more aggressive would have an advantage as aggression escalated--sure they'd be called for fouls more often, but they would also get away with more fouls and they would create a more disruptive environment more suited to their style of play. To take the strategy further these aggressive teams would be built to accommodate the more aggressive style having athletes with more strength than finesse. As a result the officiating landscape of college basketball shifted to the favor of the aggressive teams. Because this was an emergent and unforeseen development, it can be said the rulemakers in basketball failed to appreciate the risk of this.

Similarly, the founders failed to appreciate how more and more government would overrun the checks and balances system created to prevent undesired government growth. Ultimately it is the role of the Supreme Court to prevent government behavior that is prohibited by the spirit or letter of the Constitution. And generally the hallmark cases brought to and decisions made by the court have been to limit government encroachment of freedom. But as the landscape of legislative spending and action and executive regulatory zeal has developed in favor of more not less, liberty has given ground. To wit, when we are debating if Obamacare imposes a fee or a tax, we have already lost.

The implications of this are sobering. We cannot depend on the Supreme Court to undo that which we as a society have evolved to allow--that is, a belief that government rightly and pragmatically provides solutions. Reversing the tide of government growth requires both changing our understanding of the role of government as well as recognizing that stronger impediments to government growth are needed.

Cross posted at www.liberty.me

PS. This topic dovetails with the highly recommended recent Econtalk with Steven Teles discussing the "Kludgeocracy".

Sunday, March 2, 2014

Go On, Take the Money and Run

Almost three years later, I along with tens of thousands of Americans have now received back the money we had on deposit with FullTilt.com. Collectively we had about $80 million that we were using to play online poker. Suddenly on April 15th, 2011 (Black Friday) those funds were no longer available and the website and computer programs used to play poker and transact into and out of player accounts were shut down by our friends in the U.S. Federal Government. Of course, it was for our own good . . . Wish you'd stop bein' so good to me, Cap'n.

It is my understanding that playing real-money online poker has never been illegal--not before passage of the UIGEA, not between its passage then enforcement and the actions taken on Black Friday, and not after including when the DOJ said, "Oops, my bad!"

But my understanding does not matter here. Let us not have a failure to communicate when we say, "Consenting adults playing poker with their own money SHOULD NEVER BE ILLEGAL!" Alas, we do not live in a world of free markets and free minds. And so when the Attorney General of NY took action on Black Friday, he pushed online poker from the shadows and fully into the black market. Throughout this entire affair online poker has always been available to U.S. players. But as the government took a firmer hardline stance against it, the providers (Party Poker who abruptly exited the U.S. market in 2006, FullTilt, PokerStars, Bodog/Bovada, et al.) and facilitators (various third-party money transfer services) some of whom remained in the market became less transparent and less trustworthy. However, FullTilt never failed to fulfill any withdrawal requests I made including one made a few weeks before Black Friday. It remains unclear how at risk player funds were before government action versus how government action created a liquidity risk.

The fight goes on. There is strong, widespread support for poker including lobbying by the aforementioned via link Poker Players Alliance (PPA). And there is the fledgling coalition against it led by casino magnate Sheldon Adelson. No fear mongering is beyond the pale for Sheldon's group--"Online gambling funds terrorists!" "It's going to target the elderly and college-aged children, CHILDREN!"

This recent NPR piece shows where the trend is going along with the position the prohibitions are staking. From the story, Sheldon states, "I'm morally against it and I think it will kill the entire industry." Sorry Sheldon, you can't be both the Baptist and the Bootlegger at the same time. Framing it as a moral stand is transparently pathetic. But at least that would be an argument, begging the question that government should enforce your morality positions. That it threatens your business model is never an argument against innovation or for prohibition.

And so we grind on.