What do you mean a multi-billion $ gov't program has problems?!?

How could this be? Back in the 80s a government program was hatched with the explicit goal of ensuring the poor had access to telephones and the implicit if originally unintended goal of making some firms profits while politicians felt good about themselves. Somehow it went awry. Well, the implicit purpose got out of hand enough that the program has crossed over into waste, fraud, and abuse land.

I asked how can this be? Exhibit 1 (the Baptists):

The Lifeline program—begun in 1984 to ensure that poor people aren't cut off from jobs, families and emergency services—is funded by charges that appear on the monthly bills of every landline and wireless-phone customer. 

Exhibit 2 (the Bootleggers):

The program, which is administered by the nonprofit Universal Service Administrative Co., has grown rapidly as wireless carriers persuaded regulators to let people use the program for cellphone service. It pays carriers $9.25 a customer per month toward free or discounted wireless service.

That's how.

I have personally seen this program in action from both sides: Poor consumers on a street corner under a tent signing up for a phone, and a newly rich entrepreneur rent seeker whose company signs up said consumers and then passes them on to a carrier or administers the telephone plan himself. And still somehow the program's illusory value carried it passed the media's suspicion for some time. I really don't know what it takes to sufficiently raise media suspicion--that would be valuable information.

This problem has more than just some good lessons in incentives including the classic B&B example. I think it also tells us something about how we think based on our reaction to the story (i.e., who we blame and who we pity).

If asked to list out the victims and culprits, who would go in which category? To me the victims are the people taxed to pay for this program and the poor consumers who the program intended to help--more on this second group shortly. The culprits are government officials who created the program especially those who helped craft its evolution to the current mess and the private firms who participated in the fraud--this extends to lobbying to expand/continue the program and encouraging or failing to properly discourage fraud.

Notice how I don't include the poor consumers in the culprit category. Not broadly at least. While certainly there were many who knowingly abused the system, I find it hard to put much blame on people in very difficult situations responding to incentives. In fact, programs like this can be a victimizing force in the lives of those it is designed to help. There are consequences to welfare programs, poorly designed or otherwise, and those consequences can include dependency. People in tough situations do not have the luxury of always taking the ethical high road. Just evaluating what is the ethical high road may be out of their reach.

Highly linkable

Robin Wiblin presents a strong challenge to the idea that most of us are moral realists.

Scott Sumner explains a bit about the multiverse and quantum mechanics using an economics framework.

Steve Landsburg picks up on a little deception by P-Kroog.

John Papola, the great rapper, offered a critique on the state of economics, which I generally agree with, and  Arnold Kling gives some additional thoughts.

Justifying torture

A recent discussion at work regarding the movie "Zero Dark Thirty" (I have yet to see it) brought up the subject of torture. Specifically, the discussion centered on if it is justifiable and if so, under what circumstances. Having thought about this a bit before, I was able to offer my view on it. Basically, I believe it boils down to a four-pronged test:

1. Immediacy of Need/Imminence of Threat
2. Certainty of Material Knowledge held by the tortured
3. Certainty of Success in Averting Threat with Material Knowledge
4. Exclusivity of Foreseeable Alternatives

The only conceivable circumstances under which torture could be justifiably used are basically analogous to a peace officer shooting a threatening hostage taker when it is highly likely that the hostage taker is immediately about to commit a grievous wrong and when there are no reasonably foreseeable alternatives to prevent the grievous wrong from being committed. Thus, it does not seem realistic that all or even two of the criteria could be met.

It is amazing to me just how simplistic, naive, and morally shallow some perhaps many can be on this issue. Yes, this is the natural and generally rational position for us to take in most circumstances, but that defense is weakened on this issue because of its general importance combined with its relative straightforwardness--emotional baggage usually used to rationalize torture aside. Unfortunately this is not too surprising given that we live in a world where the President of the United States can unilaterally order "targeted killings" of both foreign nationals and Americans he deems an imminent threat. It seems to get to a convenient theory of justice we have started with ethics and taken away reason and accountability.

In a relative-ranking sense America should strive to have the highest human rights standards in the world, and the absolute level of those standards should be quite high in its own right.

I want to go to there.

This past week the sitcom "30 Rock" aired its final episode. I believe I saw every one. I'd rank it on my favorite list in the top 50 but not the top 10. I was a fan. Some thoughts:

• Though I'm sorry to see it go, it had run its course. It is good to see a show end in stride rather than jump the shark. And of course some jump the shark, get up, and jump the shark again. Another show still on the air that comes to mind is "How I Met Your Mother". HIMYM is dangerously close to getting on a surfboard. It is also a show in my top 50 if not in my top 10. It definitely has had top 10 moments as did "30 Rock". Put in that same category "The Office". I still like it and watch it, but I believe the shark may have been jumped some time around the departure of Michael Scott.
• While most of the shows I like tend to have multiple very good characters that nearly stand on their own, I felt like this show was dominated by two: Liz Lemon played by Tina Fey and Jack Donaghy played by Alec Baldwin. These characters were brilliant. Their lines were consistently laugh-out-loud funny and clever and their delivery was tremendous--not surprising given the quality of those actors. Tracy Morgan's character Tracy Jordan, Jane Krakowski's character Jenna Maroney, and Jack McBrayer's character Kenneth Parcell were at a few times awesome but at most times only good. Probably the design of the show to have them and so many others as extreme caricatures limited their reach. 
• The extreme caricatures was fine for most characters, but I found it problematic in one respect. I thought that Jack Donaghy versus Liz Lemon was a bit of unequal caricatures. Jack was generally all knowing and a step ahead, but he was portrayed in a way that was less charitable to his supposed political group, rich Republicans, than Liz's supposed political group, progressive Democrats. Of course, Alec Baldwin and Tina Fey are both rich Democrats. Perhaps the unbalanced approach was intentional. If so, I think it was unwarranted. But my hypothesis is this treatment where a more disdainful side comes out in one character is what I would expect if I asked a person not well versed in opposing viewpoints to create a satirical portrayal of two politically opposed characters. For a more thoughtful approach, I point to "Parks and Recreation" where the libertarian Ron Swanson is equally shown against the progressive Leslie Knope. These characters are truer to their represented group and the comedy and satirical exaggeration does not show contempt for either's group.
• I was always impressed by how far they could go on the show toward satirizing if not denigrating GE and NBC. This was to the parent company and the network's extreme credit to allow such self-deprecating comedy. I believe FOX gets credit for breaking this barrier back in the early days of "The Simpsons".

Expect more on this topic of TV shows. It seems that many of my shows are ending and several are getting up there in age, but I have started very few in the past few seasons and none in the current season going back to the fall. Perhaps I will find more time to read . . . and blog.

Some crazy scheme in order to make a profit

I want to boost traffic on this site. I know incentives work. Here is the plan:

• I want all my readers to forward links to this blog.
• To incentivize you please, inform everyone you send a link that they owe you $1. 
• Also, inform them that they too are entitled to $1 for every link they send owed by the recipient of the link. 
• It does not matter if the recipient has already received a link. In fact, that is an important part of building this network and realizing the fringe benefits.

This should create a fairly efficient Ponzi-like scheme by taking out the middle man. Based on my cursory reading of Keynesian economics, it should also boost 2013 GDP by at least 10% and bring us full employment in short order. From my cursory reading of rational expectations, just by publishing this post all the benefits should arise. From my cursory reading of monetarism, all U.S. dollar-based economies will soon be the next Zimbabwe.

I say shame, shame, shame, shame, shame, shame, shame, shame on you

A while back a Scott Sumner post titled American Shadows got me thinking about current practices, policies, and conditions in our society today that will horrify future generations. I have been planning on doing a post on it along with a sister post about current practices, policies, and conditions that will make future generations laugh, roll their eyes, and shake their heads. This week Sumner had another post along the same theme re-inspiring me. I have decided to combine the posts and will add to these lists as new items occur to me.

I grant that a case can be made for an item to be included on the opposing list or both lists. To the extent that this is a prediction (my primary goal), these are all arguable. To the extent that this is a personal commentary passing judgment on our society (a secondary goal), these are all again arguable, but for different reasons.

These are in no particular order, and I am concerned here with western society in general and the United States in particular. Considering the entire world would be a much, MUCH longer list.

Current practices, policies, and conditions in our society today that will horrify future generations:

• Immigration restrictions
• Trade policies
• Drug laws and enforcement tactics
• Treatment of homosexuals and homosexuality
• Methods of the FDA, et al. 
• Abortion as birth control
• Pain treatment and management intolerance and limitations
• Law and mores that have kept "amateur" athletes less than fully compensated (the case for this item being on this list is made when viewed in light of injuries and opportunity costs (two separate issues) that compound into life-long set backs). On this front there was a step toward justice today.
• Updated: Our tolerance for torture and other harsh treatments including prolonged, indefinite detention.

Current practices, policies, and conditions that will make future generations laugh, roll their eyes, and shake their heads:

• Government-monopolized postal delivery
• Government-run schooling
• Gambling restrictions
• Liquor laws
• Blue laws in general
• Tax policy (could easily warrant a spot on the first list)
• Regulations that aid existing businesses or other powerful interests
• Our views on many facets of science:
• Genetic alteration of plants and food
• Genetic testing and alterations in humans
• Cloning
• Stem cell research
• Our fears and understanding of climate change
• Updated: The silly ways in which we attempt to be good stewards of the environment such as obsessing about carbon footprints and shallow rationing devices to attain some mythical "sustainability" while ignoring the price system.
• Updated: Our fears of robots, machines, automation, AI, et al. This quote from a recent Econtalk with Kevin Kelly fits: "Your calculator is smarter than you right now in arithmetic. It doesn't freak you out just because it's a different kind of intelligence." 

Additions to come I'm sure . . .

I'll take Intellectual Reconciliation for $1000, Alex.

A reader sent me this screenshot of a Ron Paul Facebook post from today:

This is one of the few areas where Ron Paul and I part ways. I'm not sure relative to me if he is too pessimistic about the power of the market to overcome government failure or if I am too optimistic about the limits of government as a destructive force. Possibly some combination is the truth. We are both definitely believers in the market as a force of good and the government as a force of destruction (beyond extremely limited government). For the long-term, however, I would tend to agree with his take presuming no significant changes to the current trajectory of government growth and power. The unsustainability of the current path would imply downward corrections.

I am certainly reading between the lines on his post and perhaps making some errors when doing so.